Nigerian agribusiness Aerobic Agroforestry Limited (AAL), has received a $500,000 concessional loan from the United Nations Capital Development Fund (UNCDF). The UNCDF loan is being matched by an additional $500,000 investment from AAL, bringing the total to $1 million. This combined investment is expected to create jobs, strengthen value chains, and reinforce local sourcing and food security in Nigeria and beyond.

The investment is to be delivered through the Africa Adaptation Initiative (AAI) Food Security Accelerator, with financial support from the United States Department of State and the Government of Canada through Environment and Climate Change Canada, the financing will support the company’s expansion into plantain processing and investment in a laboratory to produce seedlings.

“UNCDF was able to help us document our investment-readiness, structure our vision, and take a level of risk that commercial lenders could not,” said Adewumi Owolabi, Chief Executive Officer of Aerobic Agroforestry Limited. “This financing allows us to invest in new activities where we did have strong convictions, skills and pre-identified partners but not yet existing track records, n processing and processing to improved planting material, allowing us to build a more resilient and integrated business environment in our region.”

AAL is a private sector integrated agroforestry and agribusiness company, located in the region of Ibadan, Nigeria, that produces and distributes high-quality seedlings for forestry trees, fruit trees, vegetables, and arable crops, while also operating food and livestock value chains. Their customer base comprises wholesalers in Ibadan, Lagos, Abuja, and aims to expand to new horizons in Africa.

AAL personnel processing cassava sourced from local farmers in Nigeria. Photo: UNCDF.

UNCDF’s financing supports two new activity streams: a plantain chips processing facility and a plant tissue culture laboratory, enabling the production of high-quality, disease-free seedlings.

The loan addresses two structural gaps simultaneously: limited access to reliable markets for farmers and insufficient availability of quality inputs. It also demonstrates a replicable financing model, combining concessional capital, local currency lending, and milestone-based disbursement to reduce risk and enable scale.

With the full disbursement of the loan, AAL is scaling its operations across the plantain value chain, from cultivation to final products sold on the market, transforming locally grown plantain into finished chips produced and packaged in its own facilities. This integrated approach strengthens production, expands local sourcing from smallholder farmers, and builds local processing and distribution capacity.

Representatives from UNCDF visit, Aerobic Agroforestry Limited’s greenhouse. Photo: UNCDF.

This investment marks a shift in the company’s growth trajectory. Previous concessional financing supported the expansion of existing agroforestry operations but did not finance new activities. However, UNCDF’s loan allows AAL to move beyond production and operate across the full value chain, from agricultural inputs to processed food products. It reduces risk for the business, strengthens its financial sustainability, and builds a demonstrated track record that is expected to attract additional private sector investment.

“This transaction shows how UNCDF’s catalytic finance can unlock growth, access to market and job creations for middle-size enterprises,” said Laura Muñoz, Regional Investment Team Lead for West and Central Africa and the Caribbean at UNCDF. “By reducing risk and supporting value addition, we enable nature-positive businesses to scale in ways that directly benefit farmers, consumers and local economies across the whole value chain.”

Value-added food products developed by Aerobic Agroforestry Limited, including plantain chips. Photo: UNCDF.

In its first three months of operations, AAL already demonstrated its capacity to source more than 15 tonnes of plantains from smallholder farmers, leading to packaged chips fully sold to supermarkets in the interval, and already several repeated purchase from the same buyers.

In addition to its activities of fruit production, vegetables and livestock, AAL was already sourcing cassava from local farmers. The cassava is then transformed into a flour, locally known as garri, which is a staple food in much of West Africa. Now, with UNCDF financing, AAL plans to expand this plantain processing model to create a reliable off-take market and reduce farmer’s losses through local transformation. At the same time, the new tissue culture laboratory aims to increase production of high-quality seedlings improving yields and strengthening resilience to extreme weather events.

The successful delivery of this loan demonstrates how targeted, de-risked finance can unlock scalable agribusiness solutions and deliver tangible results for farmers and local economies.