Meet the investor: Wangara Green Ventures thinks ag investors should focus on climate adaptation

Wangara Green Ventures is an evergreen impact and climate-focused fund headquartered in Ghana. Founded in 2019, the fund makes equity and quasi-equity investments in small and growing climate-friendly businesses.

Wangara’s founder and CEO Ebenezer Arthur is on a mission to “catalyze Africa’s green economy” by backing green and climate-friendly companies through Wangara Green Ventures. Prior to starting Wangara, he co-founded Innohub Limited in 2016, an accelerator and investment platform also based in Ghana that helped SMEs become investment-ready.

He is also a former manager at Ernst and Young Ghana who consulted for West African companies and has worked extensively for over 10 years in management consulting and the banking and financial services industry.

Wangara recently made an investment in WamiAgro, an agritech startup that’s providing access to credit, market and technical training to grain farmers in Ghana. The deal is its fourth so far and Wangara is aiming to make a total of six investments by the end of 2022 and add three more deals next year.

AFN spoke to Arthur about the fund’s investment thesis, WamiAgro’s alignment with it and what exciting opportunities the fund seeks to invest in.

AFN: Who is backing Wangara Green Ventures?

EA: Wangara is currently catalyzed by the World Bank through the Ghana Climate Venture Facility (GCVF). [This is a body established to support Ghana’s National Climate Change Policy.]

Our other investors are the Dutch Good Growth Fund and a third undisclosed investor.

AFN: How did the WamiAgro investment come about?

EA: We tend to work with quite a number of ecosystem support peers like accelerators, incubators and different programs. We find it quite a good way to source pipelines.

This [working with ecosystem peers] usually centers these pipelines that we’ll look at. If we find them interesting, we could then reach out to them and then move forward with the ones that we find interesting.

In this case, WamiAgro came to our attention through a specific program that was being run by the Alliance for a Green Revolution in Africa (AGRA).

AFN: How does WamiAgro align with Wangara Green Ventures’ climate focus?

EA: We saw WamiAgro was a company that fit what we were interested in. Not only was it an early-stage agtech startup providing services to help grain farmers especially those in the rice value chain increase their productivity, but WamiAgro was also introducing them to climate-smart agricultural techniques.

Moreso, usually when there’s talk of the climate focus, there’s so much shift towards mitigation. But in Africa, we are already dealing with the effects.

Adaptation really should be one of the things to be considered in dealing with the issues in the ag space today.

We’ll do mitigation, but for the ag space in Africa, the question is how is the smallholder farmer going to deal with issues of unreliable rainfall due to climate change or issues with productivity given that these are factors that reduce their incomes.

Businesses such as WamiAgro are impacting farmers who are mostly subsistence farmers lacking capital to afford quality seeds and machinery to prepare the land for a planting season. The business steps in to help the farmers get access to inputs that they require on credit, which goes to help them increase their productivity.

AFN: Tell me more about your investment thesis.

EA: First and foremost we focus on the missing middle. These are ventures that for us would require an investment of between $50K to $500K.

The other thing for us is the climate focus. The way we approach it is that we have priorities that we invest in, such as renewable energy, energy efficiency, climate smart agriculture, waste and water management or businesses that would fall under green sectors.

We are very mindful of ventures that help farmers become climate resilient and deal with their climate adaptation concerns – those that deal with issues around reduced yield impacted by changing or unreliable weather conditions due to climate change.

AFN: Since climate smart agricultural practices require intensive farmer training, do you go beyond provision of finances to help the ventures with farmer education?

EA: We as Wangara typically invest in ventures that already have those capabilities such as WamiAgro. We come in with capital to help them improve their own abilities to better serve the smallholder farmers.

AFN: Beyond what’s stipulated in your thesis, what are other opportunities or technologies in the ag industry that you are excited about and could potentially invest in?

EA: We are seeing a lot of activity in mobility and agroprocessing which we are open to investing in.

In the broader ag space, we’re open to ventures addressing climate adaptation concerns, those that are innovating with their inputs so that they can reduce their carbon footprint and become more circular in terms of zero waste.

For instance, there are insect protein manufacturing companies that are producing animal feed and fertilizers from the treatment of organic waste using the black soldier fly.

The process not only replaces some inputs, thereby reducing cost of production and making fertilizers and feeds more affordable for farmers, but it also reduces the overall carbon footprint of these businesses while contributing to zero waste.

This is what informs deals that we would do. These businesses address problems we are seeing on the ground. There’s a lot of wastage within the ag space, that if put to use can reduce carbon footprints, create efficiency, reduce costs and help us better deal with climate change effects.

We are open to such investments in the ag space and that’s why climate action planning for us is key going forward.

AFN: These technologies you’ve mentioned are in use in other African countries. Despite being a local fund in Ghana, would you be open to investing in startups from other countries that have the opportunities you’re interested in?

EA: Since this is our first fund, we’re focused on Ghana for now. We would be open to investing in other countries with subsequent funds but the next step after Ghana for us would be setting up a West African Fund.

AFN: Do you have a fixed number or target of investments made per year?

EA: With our current vehicle we make investments on a rolling basis. We are looking to make 15 to 20 investments, which will be both new and follow on investments.