The diversity of the AAAID’s investments and its geographical spread across 12 Arab countries place the Authority in a position of strength. Moreover, the AAAID has enriched its experience through diversified investments in various economic and agricultural climates. It also continuously monitors and evaluates the performance of its existing and under-establishment companies in order to examine their operations and activities and to provide them with the support they require to achieve their investment plans and improve their performance. In addressing any challenges, the AAAID engages with its companies to exchange views and provide support in developing effective strategies within a framework of professionalism, good governance and transparency. Therefore, partnerships with the AAAID offer astute and promising commercial opportunities that aim to optimize returns.
The Arab member states encourage the development of the agricultural sector by offering investment incentives, granting advantages and concessions, supporting infrastructure development in project areas and creating a generally conducive investment climate. AAAID constitutive and investment agreements are signed by the 21 Arab member states and grant any company, established or co-established by the AAAID with at least 25% ownership of its capital, the right to the concessions laid out in such agreements. Some of these concessions are listed below:
Exempting the operations of AAAID affiliate companies from all custom duties and similar tariffs on all its imports and exports
Providing support for all administrative procedures required for the proper discharge of the work of the AAAID and its affiliate companies
Consulting with member states regarding the legislations, systems and administrative directives necessary for the work of the Authority and its companies
Providing administrative support to activate the investment plans of the AAAID and member states to ensure project implementation
Taking the steps necessary to enable the acquisition and utilization of lands, the rights thereof and any other rights by AAAID affiliate companies
Exempting the capital and profits generated by the investments of AAAID companies from any current or future taxes and fees
Exempting AAAID affiliate companies from international monetary constraints and transfer regulations, including the transfer of funds and shareholder's profits
Exempting the AAAID from all forms of current or future taxes and fees that are normally required in the member states
Granting employees of the AAAID and AAAID affiliate companies the necessary residence permits and work licenses, in accordance with the laws of the member states
The Arab world has immense agricultural potential, however, agriculture only represents 6.24% of the total GDP of all the Arab countries combined. Although their arable lands are spread over an area of 1345.28 million hectares, only 5.38% of this land is actually utilized. The agricultural labor force is estimated at 29.76 million people.
The high domestic demand on basic food products is satisfied with imported products, with a growing food gap estimated at USD 42 billion of which grains represent 49.7%, meat 19.1%, dairy products 12.7%, vegetable oils 8.5% and sugar 7.5% . These figures are indicative of the existence of promising investment opportunities in the Arab countries.
Criteria for project selection have been defined by the AAAID’s strategy as follows:
The project must comply with the key performance indicator (KPI) "Contribution to achieving food security"
Total invested capital in any country shall not exceed 20% of AAAID’s total agricultural investments
Total invested capital in any sector shall not exceed 30% of AAAID’s total agricultural investments
AAAID’s share in the project's equity should be in the range of 25% to 49%
The project's Profitability Index (PI) should be greater than 1
Equity component shall not exceed 50% of the project’s total investment cost
The company in which AAAID will be a shareholder must have a dividend distribution policy to disburse at least 20% of the net profits
Due Diligence should be carried out for the expected partners (financial, legal, KYC)
Availability of feasibility study completed by a reputable consultant covering market, technical and financial aspects of the project
The project should be aligned with the AAAID’s programs and investment initiatives
AAAID shall provide its capital contribution concurrently with the rest of the shareholders
Ensure that potential partners are not exposed to political risks (PEP)
It is preferable that the investor has already started spending on the project
AAAID’s Agricultural Project Selection Criteria
Investment opportunities in AAAID existing companies, aimed at increasing production capacity
Investment opportunities in AAAID existing companies, aiming at expanding activities
Investment opportunities aimed at full utilization of companies’ available production capacities
Investment opportunities aimed at adding new production lines to diversify or increase production
Investment opportunities aimed at rehabilitating struggling or failed companies