AgriFI Sri Lanka set to strengthen sustainable farming finance

AgriFI Senior Investment Officer Perrine Duffaure, Sarvodaya Development Finance CEO Nilantha Jayanetti, University of Colombo Emeritus Professor in Economics and Centre for Poverty Analysis Executive Director Prof. Sirimal Abeyratne, Ministry of Environment Planning and Economics Director Kumudini Vidyalankara, and Social Enterprises and SMEs Expert Dr. Lalith Welamedage at the panel ​

• European Union delegation to Sri Lanka and the Maldives launches AgriFI local country window, aimed at facilitating green investment opportunities and aiding smallholder farmers
• AgriFI Senior Investment Officer Perrine Duffaure says 1.65 million farmers are responsible for 80% of local food production
• Lists extended tenors, partial guarantees, and technical assistance of € 300,000 as some steps taken
• Highlights AgriFI’s role in going beyond, attracting investors, integrating E&S standards, and supporting SME business models 

By Janani Kandaramage

In a green leap towards sustainable farming finance, the European Union delegation to Sri Lanka and the Maldives officially launched the AgriFI Sri Lanka Country Window in a vibrant event on Wednesday at the Cinnamon Lakeside Hotel, Colombo.

Organised under the Green Policy Dialogue Facility, an EU-funded initiative implemented by Expertise France, the event was attended by key stakeholders from Sri Lanka and Europe, including Government officials, development partners, business leaders, and impact investors to shed light on the AgriFI’s role and advance dialogue on Sri Lanka’s green economic development aspirations. 

In his welcome address, EU delegation Head of Cooperation Dr. Johann Hesse labelled the event as the first in a new series aimed at creating inclusive growth across by enhancing green investment. 

Emphasising the EU’s commitment to prioritising economic development compatible with environmental sustainability, Dr. Hesse said: “This event is more than a launch – it is a platform to turn Sri Lanka’s present sustainability ambitions into tangible investment opportunities. AgriFI is therefore, a necessary design to supporting small and medium-sized enterprises (SMEs), women-led enterprises, and smallholder inclusive models aimed at empowering farmers and diversifying their produce.” 

He added: “This will eventually strengthen supply chains, contributing to a more resilient economy.” 

Outlining the mission of AdriFI Sri Lanka Country Window, AgriFI Senior Investment Officer Perrine Duffaure described that € 6 million to 8 million will be funded to boost production and incomes for 10,000 smallholder farmers in Sri Lanka by financing private enterprises, financial institutions, and livelihood-focused funds. 

Speaking about the program’s vision, she said, “This initiative is directed at supporting organic farming and reduces post-harvest losses through innovations like improved cold chain systems, ensuring environmental resilience and therefore economic sustainability.” 

She also discussed the eligibility criteria for AgriFI, stressing the necessity for these private sector organisations to display financial sustainability, a commitment to impact-driven initiatives and transparency, and a strong focus on smallholder farmers. These attributes, she asserted, are essential to ensuring that investments yield enduring benefits, foster inclusive growth, and maintain accountability in advancing agricultural development.

She highlighted that 1.65 million farmers are responsible for 80% of total food production in Sri Lanka, and almost half of the households in the country are agricultural households. 

“The market segment involving smallholder farmers is facing a significant funding gap because of limited technical knowledge, expensive financial services, exposure to adverse weather conditions and an inadequate enabling environment. Therefore, with flexible investment instruments ranging from equity and quasi-equity to debt financing, AgriFI targets investments around between € 1 million and € 5 million, supporting enterprises that promote inclusive and sustainable agricultural value chains,” she opined.

Discussing the efforts undertaken by the AgriFI to ease access to financing, she noted that tenors will be extended from 3-8 years, technical assistance for up to € 300,000, and flexible terms such as partial guarantees and grace periods.

Elaborating further on the mandate and expected results, she assured that AgriFI will act as market developer, providing flexible funding to early-stage companies. These include offering flexible solutions for investors to step in, advocating for high environmental and social (E&S) standards, and supporting innovative commercial models to overcome scalability and cost constraints. 

She remarked: “Smallholders’ lives are expected to improve drastically, leading to outcomes such as added value for farmers, accelerated crop production and land cultivation, for instance,” adding that, “in partnership with Sarvodya Development Finance, we have already supported 604 full-time jobs, and financed 13,000 smallholder farmers already. Our ongoing due diligence for up to $ 2 million to an SME in the coconut value chain is expected to materialise in 2025.”

– Pix by Upul Abayasekara