[[{“value”:”Volcafe will receive up to $60 million for a commodity trade finance facility in East Africa. Image: Grandpas/stock.adobe.com
Global green coffee merchant Volcafe will receive up to $60 million for a commodity trade finance facility to help strengthen the company’s East African operations.
The finance from IFC, a member of the World Bank Group, and Absa Group Limited, a South Africa based financial services group, will provide working capital to facilitate the purchase of coffee cherries from smallholder farmers and local traders, as well as the processing, storage and transport of coffee to export ports.
“With this new facility we will be able to engage more directly with tens of thousands of coffee farmers while bringing their produce to even more markets,” says Volcafe Chief Financial Officer Melvin Wenger Weber.
The one-year facility, with the participation of up to $30 million each from IFC and Absa, will enable Volcafe to provide more than 75,000 farmers with access to the market.
East Africa is a coffee-growing hub, accounting for more than 80 per cent of the continent’s production and 10 per cent of the global total. An estimated five million smallholder farmers rely on the industry for jobs and livelihoods in the region. However, many smallholder farmers lack access to relevant financial support, and crop production is impacted by the unpredictable effects of climate change.
As such, the facility will deliver training on sustainable production techniques and effective agronomy practices that can help improve crop resilience and profitability for farmers through the Volcafe Way program.
In addition to the purchase of coffee cherries, the facility will permit Volcafe to purchase green coffee beans from established auction systems.
“Agriculture is a major source of jobs in East Africa, and coffee is a major contributor to those livelihoods,” says IFC Vice President for Africa Sérgio Pimenta.
“We are pleased to work with Absa and Volcafe to ensure that farmers across the region have opportunities to realise the potential of their industry.”
As part of the agreement, Volcafe is aligning its operations with IFC’s Performance Standards and has partnered with The Biodiversity Consultancy, a global provider of strategic, technical and policy services for biodiversity management, and performed a biodiversity risk assessment in its Arabica and Robusta supply chains.
The post Volcafe receives $60 million in funding for trade finance facility appeared first on Global Coffee Report.
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