Norwegian PE pays Sh476m for Vertical Agro ownership

Norwegian private equity fund, Norfund, has bought shares in agriculture firm Vertical Agro in a Sh476 million (38.7 million Norwegian krone) deal.

Vertical Agro is the parent company of Sunripe and Serengeti Fresh which makes it the largest exporter of organic vegetables in the country.

The company produces 6,500 tonnes of fruits and vegetables annually from its farms in Kenya, Tanzania and Ethiopia.

“Norfund was the first external investor in this local family business,” said the private equity fund in its annual report disclosing the investment made late last year.

Norfund is looking at growing its portfolio in agribusiness and renewable energy having invested in a number of local financial institutions and SME funds.

The fund holds shares in Lake Turkana Wind Project and Kinangop Wind Park. Norfund has invested Sh1.37 billion (111.8 million Norwegian krone) in Lake Turkana Wind Power Project which aims to provide 300MW of wind power to the national grid, equivalent to about 20 per cent of the current installed electricity generating capacity in the country.

It has committed Sh1 billion (82.7 million Norwegian krone) in the 60MW Kinangop Wind.

Last year, it acquired a 12.22 per cent stake in Equity Bank in a deal estimated at Sh23 billion. Norfund partnered with Norfinance, also a Norwegian fund, to invest in Equity Bank.

READ: Norwegians snap up Equity stake in Africa buying blitz

The Norwegian funds are targeting investments in several African countries.

The Equity investment by Norfund and NorFinance came at a time the country’s investors had targeted stakes in South Africa’s Real People, DFCU of Uganda, Socremo of Mozambique and NMBZ Holdings of Zimbabwe.

The investment comes at a time the shilling has weakened against major currencies.

Last year, Kenya exported fruits and vegetables worth Sh24.1 billion lower than Sh27.3 billion earned in 2013 following a drop in the volume of produce.

In the first three months of the year the export earnings dropped marginally to Sh5.79 billion from Sh5.80 billion.

Agricultural sector has not been a beneficiary of the shilling depreciation against the dollar owing to the US currency also gaining against the euro.

Farm inputs are largely priced in euros resulting in higher investments neutralising the turnover increase attributed to the shilling depreciation.

The shilling has lost 10 per cent to the dollar since the start of the year to cross the Sh100 exchange rate.