Half the funding for the Gulf Japan Food Fund (GJFF) will come from regional investors, with 37.5% from Oman’s largest sovereign wealth body, the State General Reserve Fund (SGRF), and 12.5% split between the Oman National Investments Development Corporation (Tanmiya), and the Gulf Investment Corp (GIC), which is owned jointly by all six GCC states.
The other half will come from two Japanese banks, Mizuho Bank and Norinchukin Bank, with Mizuho providing US$100m of the funds according to a briefing note from the bank – and presumably Norinchukin Bank providing the remaining US$100m.
35% earmarked for Oman
According to the Mizuho Bank briefing document, the fund will target an internal rate of return of 15%, and aims to support the expansion of Japanese food companies in the Middle East, potentially doubling Japan’s food exports to the region. The fund’s backers have also pledged to invest 35% of its capital in Oman.
“This strategic partnership with Japan is to fulfil many of the fund’s objectives, the most important of which is to attract direct foreign investments and technology to the Sultanate, and also to invest in vital economic sectors and to attract and localise international experiences in various fields by making use of Japanese experiences in this field,” said Abdulsalam bin Mohammad Al Murshidi, CEO of SGRF.
Gaining Japanese knowledge
Along with the GJFF’s financial clout, the Japanese government and the country’s investors have pledged to support the fund’s activities through exchanging Japanese experience and technology in the food sector, and developing the Middle East’s food security policies. Norinchukin, one of the investing Japanese banks, is a specialist financial institution for the agribusiness industry, while Mizuho is one of Japan’s largest financial services companies, and one of three “megabanks” in the country.
“The Gulf Japan Food Fund is a leading joint strategic initiative between GIC and Mizuho Bank, Ltd. of Japan,” said GIC chief executive Ibrahim Al-Qadhi.
“The Food Fund aims to assist in GCC’s food security plans and related logistics in this sector, reflecting its instrumental focus on fulfilling the commitment of the member states of the GCC towards ensuring food security in their countries, coordinating joint efforts between leading Japanese food and agribusiness companies and Gulf-based firms in assessing and implementing the needs of GCC food markets through a team of specialised professionals who will be managing the fund's operations in the region, providing needed expertise in this sector, in addition to managing related investments,” he added.