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:
The Arab world has immense agricultural potential, however, agriculture only represents 5.87% of the total GDP of all the Arab countries combined. Although their arable lands are spread over an area of 249.6 million hectares, only 26.27% of this land is actually utilized. The agricultural labor force is estimated at 24.13 million people.
The high domestic demand on basic food products is satisfied with imported products, with a growing food gap estimated at USD 48.1 billion of which grains represent 48.0%, meat 19.1%, dairy products 11.8%, vegetable oils 7.0%, legumes by 2.84% and sugar 2.0% and. 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