Addisu Hailu, founder and CEO of SA Bamboo Works in Ethiopia, which uses native bamboo to make flooring and furniture, recently presented his company to a group of potential investors.
Likewise, Theo Hakizimana, managing director of Asili Natural Oils in Rwanda, which manufactures essential oils from seeds of the moringa tree, pitched his company to the same group of investors.
Both small African companies are looking for money and were among 12 selected by the World Resources Institute to make pitches to potential investors during a four-day workshop held in Kenya in December.
These two and 10 other entrepreneurs—doing everything from growing cashews for export to North America and planting fruit trees—are part of the first start-up accelerator program for land restoration in Africa. It is sponsored by the World Resources Institute, a research organization that, among other things, encourages impact investing in companies dedicated to improving the community while making a profit. Because they are small and often located in remote areas of Africa, the companies need assistance connecting with investors.
That is where the first Land Restoration Accelerator, sponsored by the institute, comes in. The firms selected to be part of the accelerator made presentations to show how they could provide opportunities for investors from around the world, including the United States, to invest in companies dedicated to restoring land in Africa.
Investors are drawn to these investments because they provide diversity for a portfolio by being uncorrelated to any equities or fixed-income options investors might have holdings in, said Sofia Faruqi, co-organizer of the four-day seminar and manager of the World Resources Institute’s New Restoration Economy project.
“Restoring degraded land has the potential to become big business,” Faruqi said. “At a time when the younger generation is shying away from land-based activities, these entrepreneurs are racing toward it because they see a promising business opportunity.”
Globally, these projects, which are based on sustainable business models in agriculture and land use, could be worth up to $2.3 trillion and provide more than 70 million jobs by 2030 in an area where poverty and unemployment plague the population, the institute said. In addition to investors, the entrepreneurs receive training and support in operating successful businesses.
The Land Accelerator acts as a middleman between the entrepreneurs and the investors, who are often venture capitalists, high-net-worth impact investors and private equity firms. To launch the project, the World Resources Institute partnered with Fledge, a global network of accelerators and seed funds that help entrepreneurs create impactful companies and co-ops through education and mentorships.
It is too early to know what the return on investment will be for those who help fund the businesses, Faruqi said. Each agreement between the entrepreneur and the investor is different and based on the needs of the two parties. Investors could earn returns when the successful companies are liquidated, or they could receive regular dividends as the companies grow. Similar projects are planned in other countries around the world.