CDC Group commits $10M to India’s agri-food sector

London-based private equity fund CDC Group has committed Rs 48 crore ($10 million) to Rabo Equity Advisors' $100 million India Agri Business Fund. The fund invests in India’s food and agriculture-business sector, including farming, logistics, production and marketing.

In March, the fund completed its first investment for Rs 45 crore in Hyderabad-based Sri Biotech Laboratories, which is focused on generating innovative agricultural products using biotechnology to improve and protect crop yields. 

The India Agri Business Fund is expected to make 10 to 15 additional investments, for $3 million to $5 million, during the coming four years, managed by Rabo Equity Advisors' New Delhi-based team. 

Since its reorganization in 2004, CDC has committed more than $1.5 billion to funds in South Asia. It also invests in emerging markets in sub-Saharan Africa. 

According to the CDC’s new investment policy, which came into effect in January, the UK-government-owned development finance institution is focused on lending to the world’s poorest countries. The firm has net assets of £2.3 billion ($3.8 billion). About 75 percent of the lender’s investments are expected to be made in countries like India, which has an annual national income per head of less than $905.

In the first quarter of 2009, $54 million was invested in India’s cleantech sector. Jain Irrigation, India’s largest provider of micro-irrigation systems, Sri Biotech and Polygenta all received funding in the quarter. Polygenta manufactures polyester from recycled and upgraded polyester waste products (see Clean technology venture investment falls to $1 billion in 1Q09). 

Food shortages in countries such as India and China are sparking an interest in vertical farming in urban settings. Columbia University Professor Dickson Despommier is credited with developing the idea of vertical farming in 1999 (see Vertical farms for food and restoration).

This week, Vancouver, Canada-based Valcent Products told the Cleantech Group it is completing the initial pilot plant for its vertical farming technology at the Paignton Zoo Environmental Park in Devon, England. The system is expected to be operational within the next month, producing herbs, fruits and vegetables about a month later (see Vertical farm could feed animals at UK zoo).