1. Purpose of the AgriBEE Fund
The purpose of the AgriBEE Fund is to support SMME’s within the sector who wishes
to acquire shareholding in existing commercially viable and sustainable enterprises
and advance enterprise development through agro-processing and value adding
activities to the people who were previously marginalised to participate in the sector
value chain.
2. The objectives of the AgriBEE Fund
The objectives of the AgriBEE Fund are as follows:
1.1 To promote the entry and participation of black people in the entire agricultural,
forestry and fisheries value chains, through provision of funding for:
·
Equity deals, acquisition of interests in viable and sustainable enterprises in the
agriculture, forestry and fisheries sectors; and
·
Equity deals in viable and sustainable vertically integrated enterprises in the
agriculture, forestry and fisheries sectors.
·
Enterprise development initiatives to the people (small, medium and micro
enterprises) who were previously marginalised to participate in the economy of
South Africa (value addition and agroprocessing).
2.2 To ensure that there is an increased number of black people who own, manage and
control sustainable enterprises in the agriculture, forestry and fisheries sectors and
that there is improved participation by designated groups as stated in the respective
Sector Codes, namely, Black Women, Black Youth, Black Farm Workers and black
people living with disabilities, throughout the respective sectors’ value chains.
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Who is eligible?
·
The applicant must be black and the project 100% black owned
·
The applicant must be South African citizen with valid identity document
·
The applicant must be a legal entity (certificate for registration/incorporation)
·
The applicant must be directly involved in the commodity in which they wish to
invest.
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Criteria for funding
·
The applicant must be black and the project 100% black owned. Preference will
be given to the applicant whose membership consist mostly of black women,
black youth, black people with disabilities and black farm workers, and whose
proposal is linked to a commodity strategy of a specific commodity group.
·
Business plan with a clear indication of sustainability for a long term must be
provided.
·
Government employees, Land Bank employees and politicians will not be eligible
for the grant and/ or support from the AgriBEE Fund.
·
Constitutional and / or founding documents must be provided.
·
The applicant must make a presentation of his or her business plan to the Land
Bank, if necessary.
·
A minimum own contribution of 10 (ten) percent from applicants is required. The
applicant’s “own contribution” shall be paid to Land Bank. This will demonstrate
the level of commitment from applicants
·
As a general rule, the maximum grant amount that each applicant can apply for is
R5 000 000.00 (Five million Rand), provided that Land Bank and DAFF may
exercise their discretion and consider and approve applications of more than
R5 000 000.00 (Five million Rand), 20% own contribution would be required for
such cases.
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·
Only agricultural or forestry enterprise which qualifies for BEE compliance
measurement in terms of the Agricultural or Forestry Qualifying Small Enterprise
Scorecard having a total revenue (annual turnover) of less than R5 million or a
fisheries enterprise which qualifies for BEE compliance measurement in terms of
the Generic Qualifying Small Enterprise Scorecard having a total revenue (annual
turnover) of less than R10 million shall be considered (i.e. EMEs) or;
·
Agricultural
or forestry enterprise
which
qualifies for BEE compliance
measurement in terms of the Agricultural or Forestry Qualifying Small Enterprise
Scorecard having a total revenue (annual turnover) of R5 million up to R35 million
or a fisheries enterprise which qualifies for BEE compliance measurement in
terms of the Generic Qualifying Small Enterprise Scorecard having a total
revenue (annual turnover) of R10 million up to R50 million may be considered
(i.e. QSEs).
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Pre-requisite for funding
·
The cash flow projections must be realistic and positive.
·
In an instance where a loan is/will be sourced to cover own contribution, an
indication of repayment ability should be evident.
·
FICA verification documents may be required.
·
NCA documents need to be submitted/ completed where necessary.
·
Agricultural Economic Study (AES) reports are required.
·
The applicant must have a market partner or identified market, market plan in
order and signed contract/ undertaking/off-taker agreement/s, preferably a longterm off-taker agreement from partners to qualify for funding.
·
Utilise a proposed management model to ensure that the equity deal and/or
interest acquisition is secured over the longer-term.
·
The applicant must have skills on the intended business operation it plans to buy
into (furnish proof thereof when required in a form acceptable to the Land Bank).
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·
Viability studies will be conducted by the Land Bank as part of the Due Diligence
process. In this regard, the report of such studies shall form part of the
evaluation.
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Conditions for funding
·
The applicant must source the portion required as own contribution from any
funding source of their choice and furnish DAFF with supporting evidence.
·
The security of the loan shall be in accordance with Land Bank's valuation policy.
·
The applications must be submitted to the relevant Provincial Department of
Agriculture point of contact.
·
For new equity deals, applicants must hold at least up to 49% in the initial period
·
The applicant must have a clean credit record and be credit-worthy
·
The nature of shares on offer under equity deals are ordinary shares
·
Compliance with regulatory issues (Environmental Impact Assessment, Water
License, etc.)
·
Proposals must be tied to the elements of the Sector Codes and the entity must
comply with BEE-rating and verification processes
·
Preference shall be given to applicants who want to acquire equity in viable
entities that operate w\within their line of commodity
·
The applicant must supply the Land Bank with reports, which include financial
reports (Statement of Income and Expenditure, Bank Reconciliation Statements),
status reports (progress in regard to production), where applicable, the Balance
Sheet, and all other reports requested by the Land Bank in a loan agreement in a
format and within the time frames set out in the loan agreement.
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AgriBEE Fund products:
a.
Equity Acquisition
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For equity ownership and interest acquisition across sector value chains, the funds
shall be utilised as follows:
i. New Equity Deals
This is meant for empowerment of the designated groups who are starting new
projects which would result in their equity ownership and or acquiring other interests
in an agricultural business enterprise.
ii. Increasing Equity Ownership And Interest Acquisition
This is meant to support acquisition of increased equity share and/or other interests
in a viable and sustainable Measured Agricultural Entity. In essence, the funds will be
available
for
transforming
narrow-based
empowerment
into
broad-based
empowerment through increasing shareholding and interest acquisition by black
owned entities
Below is the check list for equity deals:
·
Completed and signed application form
·
Business plan of the identified partner where investment is intended, with the clear
indication of sustainability for a long term
·
CVs / profile of the applicants and identified partner(s)
·
Registration certificates for both applicants and identified partner(s)
·
Constitutional and / or founding documents must be provided. If it is a trust, trust
structure is required
·
Identity Documents for both applicants and identified partner(s)
·
Three (3) year consecutive audited financial statements (Balance Sheet, Income and
Cash Flow statements) for both applicants and identified partner(s)
·
Shareholder’s certificates
·
Tax Clearance certificates for both applicants and identified partner(s)
·
Letter of intent from the seller
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·
Off take Agreements
·
Letter of support from the Provincial Departments of Agriculture
·
Trust deed for farmers organized into a Trust.
b.
Support For Agro-Processing/Value Adding Enterprises
For enterprise development initiatives (value addition and agro-processing), the fund
will be utilised as follows:
i. Start-up processing/Value-adding businesses
This is meant for funding interventions for new enterprises in the two approaches,
namely: clusters and niche export products will be supported. This does not exclude
any other intervention models that might be applicable on a case-by-case basis.
ii. Existing processing/value adding businesses requiring expansion capital
Funding for existing enterprises will be done in consideration of up-scaling
operations; these enterprises are successful and doing very well, however, with
some support, they could increase their operations so that they can enhance
competitiveness to generate more output and jobs.
In the event that the applicant is a newly formed entity (organized farmworkers) or the
applicant acquires full ownership of a business as a going concern (increasing equity), the
applicant must indicate the management structure of his/her business which includes the
empowerment of designated groups, management skills and qualifications, roles and
responsibilities of key personnel and role players as well as succession planning. The
management of the applicant entity must be skilled in financial management and project
management before they can start to utilise the funds and authorisation to start utilising the
funds should be obtained from DAFF and in writing. The funds must only be utilised for the
purpose for which they are advanced and/or applied for.
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Below is the check list for agro-processing and value addition:
·
Completed and signed application form
·
Business plan of the applicants with a clear indication of sustainability for a long term
·
Profile of the applicants
·
Registration certificates for applicants
·
CVs of the applicants
·
Identity Documents for applicants
·
Three (3) year consecutive audited financial statements (Balance Sheet, Income and
Cash Flow statements) for applicants
·
Market guarantees for applicants
·
Tax Clearance certificates for applicants
·
Offtake Agreements
·
Letter of support from the Provincial Departments of Agriculture
·
Constitutional and / or founding documents must be provided
·
EIA report may be required. Applicants should indicate in their proposal whether the
EIA report will be required or not as the schedule provided in the NEMA(National
Environmental Management Act)
·
Quotations
The following are excluded:
·
Purchasing of farms and farming / fishing / forestry infrastructure at primary level (the
Fund supports post production activities such as agro processing/value-addition)
·
100% acquisition of a business at initial investment by the applicant
·
Investment in farms under land claim
·
Applicants who are not involved in the sector in terms of farming, fishing and forestry
activities will be excluded (passive or speculative investors)
·
Government employees, Land Bank employees and politicians will not be eligible for
the fund
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Enquiries may be directed to the Department of Agriculture, Forestry and Fisheries for the
attention of Ms Viwe Sibelekwana, email address: [email protected]. Technical enquiries,
support with formulation of proposals and request for application forms should be directed to
the respective Provincial Department of Agriculture. Application forms are also available on
DAFF website, www.daff.gov.za >>>Resource Centre>>>AgriBEE Fund. Fully completed
application forms accompanied by all supporting documents should be hand delivered to the
respective Provincial Departments of Agriculture.
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