The Africa Enterprise Challenge Fund (AECF) 

The Africa Enterprise Challenge Fund (AECF) is a multi-donor funded financing vehicle that provides grants and interest free loans to businesses who wish to implement innovative, commercially viable, high impact projects in Africa. The AECF supports businesses working in agriculture, financial services, renewable energy and technologies for adapting to climate change. It also supports initiatives in media and information services where they relate to these sectors.


The AECF is managed by KPMG IDAS. The AECF is funded by the UK’s Department for International Development (DfID), Australia’s Department of Foreign Affairs and Trade (DFAT), the Ministry of Foreign Affairs of the Netherlands (MFA), the International Fund for Agricultural Development (IFAD), the Consultative Group to Assist the Poor (CGAP), the Danish International Development Agency (Danida), and the Swedish International Development Cooperation Agency (Sida).  


As programme manager since 2008, KPMG has grown the AECF from US$30m to US$190m (far exceeding target growth of US$75m), run 16 funding window competitions, received and processed 4,500 applications, and approved 133 projects in 22 African countries. Through this extraordinary growth, the fund has had a positive impact on the lives of roughly 4 million poor people living in rural areas. AECF is pioneering the use of a challenge fund mechanism as a powerful, transparent way to leverage donor funds for private sector development and make markets work better for the poor.


The AECF is a special partnership initiative of AGRA, the Alliance for a Green Revolution in Africa.


Project Highlights


  • Tanga Fresh: this company in Tanzania has set up a modern dairy service network to increase the production, collection and supply of milk from smallholder dairy farmers. The network is increasing incomes and improving livelihoods for 4,500 farmers.
  • Biolands International: In Sierra Leone, this ambitious project is transforming the cocoa market by improving the quality and quantity of cocoa (including introducing organic and social/fair trade certification where possible) produced by smallholder farmers. The company is also working with farmers to market the improved cocoa at higher prices, raising the profile of the entire national cocoa industry. As of 2011/12, the project had contracted over 30,000 farmers.
  • Zimbabwe: AECF portfolio companies Produtrade, Kurima Gold (formerly Paperhole), and Kencor are each developing new systems to supply agricultural inputs to small farmers in Zimbabwe and to buy their produce after harvest. These companies together are making a major impact on the agricultural inputs market system in Zimbabwe. This is one example, through a single-country funding window, of how challenge funds can cause positive systemic change in a market.



Many of the projects in AECF’s portfolio are still young. Due to the highly innovative and therefore risky nature of these businesses, AECF expects (and has already begun to see) a mix of commercial success and failure. However, the development impact of AECF projects is already quite significant. Portfolio results highlights as of 2011:

  • Net benefits in 2011 of US$ 54.4m for 577,361 rural households (an increase of 319,065 beneficiary households since the start of the projects)
  • US$ 3.7m of increased wages to 1,577 new employees
  • Increased turnover by AECF grantee businesses of US$ 58.4m


Client Feedback

“If you look at the volume of what we do, this has been a miracle. In no time, we have become one of the most prominent development finance instruments in Africa. KPMG’s engagement with companies and other organizations across the continent has encouraged the private sector to innovate and invest in new financial and agri-business products, services and projects that will benefit large numbers of the rural poor.” – Andre Dellevoet, AGRA

“The KPMG team, by being innovative and flexible, have introduced debt finance in addition to grants, and adapted the AECF into a mechanism that can run competitions for different geographies, topics and sectors – things that no other challenge fund has achieved successfully.” – Hugh Scott, AECF Director

“AGRA can confirm that KPMG has the technical capacity and social responsibility to provide services to manage development funds in a transparent and efficient way and we would highly recommend KPMG without reservation.” – AGRA

From the Grantees



Challenge funds as private sector development tools: progress and potential

In recent years, challenge funds have emerged as an innovative way to engage the private sector to promote pro-poor economic growth and community development.

In Shaping the Power of Markets for the Poor, we consider the anticipated impact of one market-shaping, pro-poor initiative set up by KPMG Africa Development Advisory Services, The Africa Enterprise Challenge Fund (AECF).