Last week, AgDevCo announced that the specialist investor has sold a commercial farming business based in northern Ghana to a locally owned agribusiness, Oba Pack Company. AgDevCo set up the Babator Farming Company (or BFC) as a greenfield project in 2016, investing a total of $6.9 million in equity and debt in the business in what was the first of a planned series of irrigated commercial farming units for the Babator Irrigated Farming Hub (BIFH), an agricultural concession on the Black Volta River in northern Ghana’s Savannah region. How much Oba Pack is paying for BFC had not been disclosed as we went to press.
BFC is a 356-hectare irrigated farm, growing maize, sorghum, onions, and other arable crops. In financing and developing the farm and its management team, one of AgDevCo’s key objectives was to provide investors with a successful proof of concept and catalyze more capital to develop additional agribusiness projects within the 5,740-hectare Babator Irrigated Farming Hub. Oba Pack’s acquisition of BFC represents an important milestone for the initiative.
“BFC enables us to start farming immediately, with secure access to land, machinery, and equipment,” said Oba Pack’s CEO, Obed Asante, explaining the acquisition’s benefits to his firm’s vertical integration strategy. “There is ample year-round irrigation, good road infrastructure, and a strong relationship with local communities developed by AgDevCo.”
Oba Pack will grow onions and soya beans at the farm. The company aims to grow over 7,000 tonnes of onions at BFC, which will be processed at Oba Pack’s facility in Tuoodum. These will be sold to the domestic market, which, despite using onions as a staple in local cuisine, still imports over 90% of the onions it consumes. As well as acting as a critical component in promoting good soil health, the soya beans grown will be sold to Ghana Nuts Company to be processed into soy cake for use as feed by the local poultry industry.
The BIFH concession has an additional 5,000 hectares of irrigable farmland available which AgDevCo aims to encourage other commercial investors to invest in and develop. AgDevCo’s trials have shown BIFH to be suitable for the production of a wide variety of crops, including grains, legumes, vegetables, and fruits. The investor reports that there is especially high potential for irrigated bananas.
Open Capital advised AgDevCo on the sale of BFC. Charles Russell Speechlys and SESI Legal worked on the legal aspects of the transaction