Food security is an increasing priority for many countries and notably, in the Middle East. Does sovereign investment present a long-term opportunity for Africa? Is food security becoming an increasingly important benchmark for countries outside of Africa?
It is important to first define what is “food security” from an investor’s perspective. AIIM’s investment thesis operates along three key themes: (i) digitization: which focuses on investments in digital infrastructure; (ii) energy transition, which is about developing accessible and clean energy through the continent; and (iii) what we call “mobility and logistics”. Mobility and logistics encompass two main focuses: (i) critical minerals, and (ii) food security.
Looking at food security more precisely, AIIM is primarily interested in three areas:
- temperature-controlled logistics: we developed, through a buy-and-build strategy, one of the largest cold storage platforms in Africa (Commercial Cold Holdings). Commercial Cold Holdings has a capacity of approximately 160,000 pallets, 27,000 sqm of controlled warehousing and it is one of the top-25 cold storage businesses globally. This is a distinct strategy where we focus on both frozen and chilled products;
- port and back of port (inland) infrastructure, getting goods to and from Africa; and inland transportation, storage and distribution for a range of primary bulk food commodities such as wheat, fertilizer, and edible and vegetable oils.
Going back to your question, we have found that those themes resonate with sovereign investors and we have been able to successfully attract sovereign wealth capital, including from the Middle East and Asia-Pacific.
On a more ‘direct investment’ basis, the Middle East is generally looking to increase its footprint in arable land and water resources, whilst Africa has over 60 percent of the world’s uncultivated arable land (874 million hectares) but sometimes lack the depth of capital readily available in the Middle East. It is easy to see why a trade makes sense for both parties. You have capital flowing in and assets that have the ability to generate produce flowing out.
A pertinent question to ask in this context is: What can governments do find the right balance between the “macro” (encouraging external investments) and the “micro” (protecting local farmers and trade?) From a holistic strategy, some of these elements need to be safeguarded when governments craft policies and, as responsible investors, this is something we look at as well.
In terms of land rights, investors need a degree of confidence that the arrangements they are entering into will be beneficial to them, as you want it to be a stable and long-term investment in Africa that benefits both the investors and continent without volatility.
Yes, that is exactly the point and a strong focus for us. To give a practical example, we have managed to secure long-term concessions in highly strategic areas for our cold storage business, along with our ports and logistics businesses. Investors are looking for property rights and clarity concerning concession terms (and termination rights, etc.).
AIIM is an investment manager focused on private equity (PE) infrastructure investments. But, a number of AIIM’s investments relate to food security in Africa across the value chain (for example, Sodigaz – clean cooking, Commercial Cold Holdings – cold storage and Incorp – logistics). What role can PE and infrastructure investors play in improving food security in Africa? Does food security in Africa constitute a key objective of AIIM?
It is one of the key themes that underpins our investment strategy.
When we developed our investment approach , we identified a number of sectors with strong tailwinds where there was a mismatch between supply and demand, and importantly, where that mismatch could be filled by private stakeholders.
Some of the lessons that we have learned over the past 10 to 15 years is that—particularly, after COVID—in a number of countries, private sector actors could help support the public sector in progressing infrastructure and societal needs, and food security, even more specifically, cold storage, falls within this.
For example, with the acquisition of the bulk storage infrastructure of Oceana, a major fishing company headquartered in South Africa, to sell us their bulk storage infrastructure, we have with private capital created a leading bulk storage platform that operates efficiently and is competitive. Costs saved resulting from the efficiencies created passed through to the customers and ultimately to the end-consumers. The investment ultimately also lead to the set-up of a new platform to reinvest in more cold chain infrastructure.
We replicated this model with another South African business, the Logistics Group. It was owned by a listed investment company, and we carved it out from this business, whilst re-positioning the platform to handle cargoes in two main areas: critical minerals and citrus exports. South Africa is one of the biggest exporters globally of citrus products and we have become quite adept at handling these products. Again, an example of private capital—through an existing investment portfolio company or a platform—growing and offering customers additional capacity at more competitive rates.
In East Africa, we have also invested in =a ports business that handles a range of commodities including grain, fertilizer and vegetable oil. Our plan is to continue expanding the infrastructure, driving service efficiencies and ensuring that benefits flow through to the consumer.
What criteria or metrics does AIIM consider when evaluating an investment related to food security in Africa? Are there specific ESG thresholds or impact benchmarks you consider (also for monitoring investments)?
Although, like any fund we are ultimately focused on creating attractive returns for our investors, we are a fund that does not just look at financial return. We have important sustainability measures that we drive across each of our investments. It is about creating a baseline at the start, setting realistic targets and then actively monitoring improvements throughout the entire investment period. In the food security space, that is cold storage, for example.
Cold storage is an energy-intensive business, and we therefore look at certain specific energy metrics across the portfolio, with the aim of reducing both costs and carbon intensity. We are also focused on gender initiatives to increase the representation of women in the workforce. Those are some of the key metrics we focus on in the food security space.
Where is Africa today in terms of food security and infrastructure to support it? Are private capital and private investment critical to the development, either directly or indirectly, of infrastructure to support food security in Africa?
Yes, I think that is absolutely critical and relevant across the entire spectrum of private capital, from venture capital and growth equity to infrastructure. Our focus as “infra” investors is on building and owning hard assets and providing a service on a long-term contracted basis, which plays a role in developing the backbone for some of the food transportation and distribution across the continent.
With our investment in East Africa for example, the entire proposition is providing supply chain resilience in certain edible commodities to the Kenyan market. That includes grain, fertilizer and cooking oil. These are all commodities that are handled by the facility, and they play an important role in providing supply chain resilience for the Kenyan market.
Regarding infrastructure in Africa, are there any particular areas that you see as real growth? Are there any areas of growth in infrastructure that are pressing and will become a reality in the next five to ten years?
We have selected our themes primarily with this in mind, but we wanted subsectors with secular (or long-term) trends, not cyclical ones. The three mega-trends that are happening globally are also occurring in Africa but for different reasons.
The first theme is the surge in data consumption. Globally, it is being driven lately by AI, but in Africa, it is still largely being driven by mobile data consumption. Smartphones are becoming more affordable, and the internet is being delivered primarily through the mobile phone. This creates the opportunity to construct the communications backbone. We are seeing this trend across fiber-optic, towers and data centres. With data centres, there are also more tailwinds to come with AI and related infrastructure that will need to be deployed.
The second theme is what we are broadly calling energy transition. Here, the opportunity is shifting. We are seeing opportunities at scale in liberalised markets, where one can generate electricity, send it through a grid and sell it to private customers with relative ease from an administrative perspective. That is a phenomenon you can observe in South Africa, for example.
We have seen serious increase of capital coming into the market. On the AIIM side, we have set-up—from scratch—a platform called Net Zero Africa, in South Africa and have committed over US$200 million of equity into that platform. That business owns its own energy generation assets (including wind, solar and batteries), trades energy, aggregates it with energy procured from third-party generators and then provides it all to private customers.
That solution seems to be very commercially attractive to customers.
The final theme is mobility and logistics, which focuses on smart ways to capitalize on the urbanization that is happening in Africa. Some studies say that, over the next 25 years, there will be more than 900 million people in Africa moving from rural to urban areas. Think about the infrastructure that is going to be required to support this.
That isa mind-blowing statistic, isn’t it? And it underlines the importance of talking about food security in very general terms, such as food supply to these urban centres which is, of course, completely game-changing.
Do any jurisdictions in Africa stand out for creating an investor-friendly environment, and are there particular countries or regions in Africa where you see the greatest opportunities or challenges for food security related to infrastructure investments? Similarly, are there any subsectors within the broader food value chain, such as cold storage, logistics, irrigation or agri-fintech, that you think present the best opportunities?
Regarding geographical locations, AIIM focuses presently on six to eight core countries before potentially expanding into neighbouring economies. Whatever we do, we want to be strategic about it.
We first need to consider what we do as an investor: We buy or build assets, grow them and, ultimately, we sell them. The ability to look for a successful exit is really driven by the quality of the assets but also where the assets are located. Key aspects when considering this are the depth of the market for liquidity and the track-record of the market for attracting global buyers. Not every market, regardless of size, has historically been attractive.
Over the past ten years, one of the trends we have seen is macro-volatility, which includes currency, but also rates. For example, we have seen countries going through significant changes in interests rates and inflation, capital repatriation difficulties or currency crises.
The past is not necessarily indicative of the future, but it is often the guide that investors will turn to.
With respect to our current fund, we are clearly looking at the larger markets but also the markets that have a somewhat stable currency or the ability to hedge. We have also a key interest in markets that have demonstrated the ability to attract large trade buyers.
I mentioned earlier the digital side with data centres. The towers opportunity today is a little different than it was 15 years ago. Back then, it was about acquiring portfolios, whereas today, we see more opportunities to develop new greenfield projects.
Whether you can generate power and distribute it to large private sector clients at scale are important factors. Africa still has growth room to get to the level of scale required.
In the mobility and logistics space, as well as in the areas of food security and critical minerals, being an integrated logistics provider is essential. In the critical minerals sector, it’s managing the logistics process from the pit (or mining site) to port. As investors, we want to own or be involved in the integrated infrastructure, which encompasses taking metals and minerals from the pit to owning the port infrastructure.
Final thoughts ?
We are excited about the investment opportunity in Africa. With our experience, we have developed a framework that is working well and we are confident there are still many places where we can bring our expertise.
Regarding food security, this is a topic that is fundamentally tied to geopolitical trends across the world which means it is an exciting and constantly evolving environment with its challenges and opportunities.
Supply chain resilience is becoming increasingly important, with food security as a critical component. When you combine that with the current needs for supply in Africa, a booming population and increasing urbanization, it creates not just a business opportunity but a business imperative.
Private and public actors need to solve this issue. And we are glad to be playing our part in that.
White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
© 2025 White & Case LLP