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AAAID Aims to Close
the Estimated USD 33 bn
Food Gap in Arab Countries

Although rich with promising agricultural investment
opportunities, only 5.3% of land in the Arab world is actually utilized

Advantages of Investing in AAAID Companies

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.

AAAID Companies Enjoy Exemptions and Concessions in Accordance with Constitutive Agreements

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

Agricultural Investment Opportunities in Arab Countries

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 33.58 billion of which grains represent 54.5%, meat 19.4%, vegetable oils 9.3%, dairy products 10.1% and sugar 7.9%. These figures are indicative of the existence of promising investment opportunities in the Arab countries.

Grains

54.5%

Meat

19.4%

Vegetable oils

9.3%

Dairy

10.1%

Sugar

7.9%

AAAID’s Agricultural Project Selection Criteria

Criteria for project selection have been defined by the AAAID’s strategy as follows:

Project should be in line with the AAAID’s objective of producing basic food products

Project should utilize integrated technologies and broaden agriculture experiences

A comprehensive technical, financial and economic feasibility study should be available for the project

Investment cost of the project should be no less than USD 20 million

The project’s internal rate of return (IRR) should be no less than 12.5%, considering the levels of risk and return

Project should integrate agricultural production and processing in one or more member states

Serious shareholders with sound solvency positions should be available

Feasibility study should include disassociation procedures

AAAID’s contribution must be between 25-49% of the total equity capital of the project

Equity should be between 40-60% of total investment cost

Project should be in line with the AAAID’s objective of producing basic food products

Project should integrate agricultural production and processing in one member state or among various member states

Project should utilize integrated technologies and broaden agriculture experiences

Serious shareholders with sound solvency positions should be available

A comprehensive technical, financial and economic feasibility study should be available for the project

Feasibility study should include disassociation procedures

Investment cost of the project should be no less than USD 20 million

AAAID’s contribution must be between 25% - 49% of the total equity capital of the project

The project’s internal rate of return (IRR) should be no less than 12.5%, taking into consideration the levels of risk and return in the relevant country

Equity should be between 40-60% of total investment cost

Investment Opportunities Available in AAAID Existing or Under-Establishment Companies

Opportunities offered by the AAAID range from investments in existing companies to investments in those still under establishment, so investment funds may be used for either the expansion, development, rehabilitation or restart of current AAAID companies, or as capital for the AAAID’s under-establishment companies. Investment opportunities at the AAAID are categorized as follows:

01

Investment opportunities in AAAID existing companies, aimed at increasing production capacity

02

Investment opportunities in AAAID existing companies, aiming at expanding activities

03

Investment opportunities aimed at full utilization of companies’ available production capacities

04

Investment opportunities aimed at adding new production lines to diversify or increase production

05

Investment opportunities aimed at rehabilitating struggling or failed companies