Silverlands, a private equity fund by SilverStreet Capital, is focused on commercial-scale primary agricultural production across southern and eastern Africa. Silverlands’ purpose is to help smallholder farmers maximise productivity through improved inputs and access to offtake markets, particularly for higher-value crops. Climate-smart agriculture, such as conservation farming practices, has been central to the fund’s ethos since its inception. In 2011, BII made an investment of $20 million in Silverlands, with the aim of increasing food production and strengthening farming in the region.
The ESG I team has worked with SilverStreet to develop the fund’s E&S management systems and capacity. This involved hiring a dedicated ESG Manager at the Fund—two more have since been added—and developing people within each portfolio company to establish an ESMS that effectively monitors and tracks data on key parameters including climate change.
Using a Responsible Investment Code similar to our own, SilverStreet has embedded ESG processes into all of its main investment stages. The Head of Impact and ESG is a voting member of the Investment Committee.
Working with Silverlands’ ESG Manager, we identified strategic ESG priorities and proposed targeted interventions with an emphasis on climate. These interventions are now regularly reported on in SilverStreet’s Annual Impact and ESG Reports, demonstrating commitment and oversight at the senior level. They include the following measures:
- Improving land and soil management by implementing minimum tillage techniques across all Silverlands farms.
- Delivering training programmes to smallholder farmers in the fund’s outgrower network on conservation farming methods, including minimum tillage, composting, mulching, and crop rotation. These practices help to increase soil organic matter, which reduces soil erosion and produces a carbon benefit.
- Developing and improving access to drought-tolerant hybrid seed varieties, which have reduced demand for water. Increasing yields per hectare using hybrid seed is a key climate mitigant as it reduces the number of hectares required to feed a growing population. SilverStreet has become the largest grower of hybrid seed in Tanzania and has invested in a Zambian seed business to help increase the use of hybrid seed regionally.
- Implementing efficient water resource management through conversion to drip irrigation at Silverlands farms.
- Using technology to improve water management and water-use efficiency, including flow meters, variable speed drive pumps, drip and micro-sprinkler irrigation systems and soil moisture probes at farms.
- Reducing waste by improving the accuracy of nutrient and pesticide application through the use of Normalised Difference Vegetation Index imagery.
- Improving pest management by frequent pest scouting (and training employees as pest scouts), and implementing various non-agrichemical pest control methods including: erecting bat houses (to increase the natural predation of insects), and using pheromone-dosed tags (to disrupt mating in moths).
- Reducing the volume of hazardous wastes by introducing supplier take-back schemes for agrochemical containers.
With BII’s support, SilverStreet significantly improved its capacity to identify, understand, manage, and monitor E&S risks in agriculture. Integrating climate into the fund’s approach has been a business success and provides a good benchmark for other agribusiness funds.
SilverStreet has gone on to win awards for its impact and ethical approach to investments. It won Ethical Investment Manager of the Year two years in a row from Corporate LiveWire, as well as Best Impact Investor UK and Best African Agriculture PE Fund from Wealth and Financial International.