Third Call for Proposals - Projects approved by the EB (May 2014)
New guidelines for the Operations of the Common Fund for Commodities for the period 2013-2015 were approved by the Governing Bodies in 2012 which mandated the Secretariat of the CFC to invite proposals for funding for commodity development through an open call for proposals. The third call for proposals was initiated in August 2013 and the proposals meeting the criteria specified were reviewed by the Consultative Committee (CC) of the CFC in its meeting held in January 2014. The CC had recommended six proposals ranging from dairy production to maize trading to vegetable production for approval. The proposals were reviewed by the Fund’s Executive Board at its 57th meeting held in May 2014. The following projects were approved by the Board.
Expansion of the Dairy Farm and Value Addition |
Overall cost: USD 576,875 CFC financing: USD 272,000 (Amhara regional State, Ethiopia) |
| The project aims at addressing the increased demand for dairy products from the consumers in the region, especially the two universities located near the farm, which demand hygienic food products such as packed milk and cheese for consumption by students and staff. The proposed investment in processing, packing and labelling equipment would add value to the farm products in terms of quality, product range and hygiene, while the introduction of improved breeds would increase farm productivity and the overall turnover of the farm. With the implementation of the project, the farm would be able to serve the increasing demand for lower-cost but better quality dairy products in the region, contributing to the increased food security of the population. |
Implementation of a Milk Fractionation Process as Technological Alternative to use of Raw Milk |
Overall cost: USD 9.332 million CFC financing: USD 1.5 million (Department of Cesar, North-Central region of Colombia) |
| The project aims at establishing a milk fractionation plant, which uses membrane filtration technology (Ultrafiltration, Microfiltration and Reverse Osmosis) for the production of premium price dairy ingredients such as Milk Protein Concentrate (MPC) and Lactose by the Colombian dairy company Alquería S.A. Based on the wide range of possible applications of these dairy ingredients, the potential portfolio of customers will range from dairy beverage producers to specialized pharmaceutical laboratories. The company will focus on business-to-business marketing, targeting national and international companies operating in the food industry such as manufacturing companies of specialized nutritional supplements, energy food & drinks for sports-specialized nutrition, and dairy products of high value added (infant formulas, Greek yogurt). With the implementation of this project, Alqueria will be the first national company producing dairy ingredients in Colombia and will compete against international suppliers with a marketing strategy based on competitive prices and short time delivery. |
Rural Injini (Engine) Inclusive Maize Trading & Processing - Joseph Initiative Ltd |
Overall cost: USD 1.929 million CFC financing: USD 500,000 (Uganda) The CFC contribution will be funded from the Dutch Trust Fund managed by the CFC |
The project aims at efficient bulking and processing of maize from Ugandan smallholder farmers in order to serve regional wholesale suppliers with high quality maize. The company applies a fully integrated approach in their trading operations, with rural collection centres and mobile village buying agents that enables them to keep close contact and collect maize in small individual quantities from remotely located farmers and to pay on the spot. The proposed trading model provides a predictable market and would reward quantity and quality of product. This will create an incentive for smallholders to intensify their production and to supply quality produce. The business model explicitly concentrates on "bottom of the pyramid" farmers producing 1 MT or less, who are thus below the commonly accepted aggregation thresholds for commercial traders. A reliable market and access to input and finance will lead to an increase in income for those farmers. Inclusion of this huge number of individual producers, incentives to increase productivity and the potential reduction of the current 40% post-harvest losses could lead to a substantial improvement of food security in Uganda |
Commodity Value Chain Finance Program |
Overall cost: USD 800,000 CFC financing: USD 400,000 (Burkina Faso) The CFC support is envisaged to be covered from the OPEC Fund for International Development contributions to the CFC |
The project aims at cashew value chain financing to stimulate smallholder cashew production. The CFC’s support enables the expansion of the micro-credit program to cashew farmers. ACFIME is a registered micro finance institution operating in Burkina Faso focusing on micro credits for small holder farmers and farmer groups, in particular women. The ACFIME also provides saving and fund transfer facilities. Its client base has grown from 1600 clients in 2007 to over 8000 clients in 2012, of which about 80% are women. ACFIME has established a specific program for cashew producers. Starting with 850 in 2012 it now intends to grow to reach 3000 producers in the cashew production sector. Tripartite collaboration between producers/producer groups, processing factory/trader and ACFIME as a finance institution will sustain the development of the cashew value chain. |
Production & Export of Fresh Vegetables for the European Market / Ethiopia |
Overall cost: USD 3 million CFC financing: USD 750,000 (Ethiopia) The CFC contribution will be financed from the Dutch Trust Fund managed by the CFC |
The project targets export of fresh vegetables to the European market. The focus is on horticultural products, initially snow peas, sugar snaps, baby corn and green beans for export by sea freight to Europe and possibly the Middle East. The project aims at the establishment of an agricultural enterprise in Ethiopia, whereby a nucleus farm cum processing facility would be established for the production and processing/packaging of horticultural products. Extensive outgrower involvement is foreseen following the effective start-up. Products are targeting initially European export markets as well as local markets. The project proponents have obtained extensive experience in operating similar activities in other countries. The new start-up company Koga Veg will be led by Durabilis NV until the company reaches maturity and management can be handed over to a local team. Durabilis NV is a Belgian investment company with social development goals, with more than 10 years of experience with production of fresh fruit and vegetables in Africa (Burkina Faso, Senegal, Mali) and Latin America (Guatemala, Peru), marketing these products to Europe. |
Reach sustainability of social business StarShea Ltd., through new buying model and improved women's revenue |
| It is envisaged that the CFC support to this project will be covered from the contribution of the OPEC Fund for International Development (OFID) to the CFC. |
The company StarShea Ltd was established as a social business in Ghana supporting sheanut producers by providing them with access to international markets for shea nuts and butter. Through its linkage with the StarShea network, the company reaches a supply base of more than 10,000 (mainly women) producers. The company procures quality shea nuts at premium prices and provides services for production and marketing. The company requested CFC support for the expansion of its program, both in scale and range of services. The project will pursue three main lines of operations: 1. Expanding purchases of sheanuts from smallholder women. The company will use its working capital to offer better payment terms and buy sheanuts with a premium against low seasonal price; 2. Buying sheanut butter produced at the village level, supplying it to social buyers with organic and/or Fair Trade certification where applicable, direct in unrefined form, or after refining in Europe; 3. Implementation of centralized environmentally friendly sheanut processing unit. The processing of sheanuts into butter at a central location would improve quality and significantly reduce environmental pollution compared to smallholder processing |
FAST TRACK PROJECTS
In addition, the Executive Board took note of the Fast Track projects approved, following a positive recommendation thereof by the Consultative Committee in January 2014.
The SME Impact Investment Opportunities |
| CFC financing USD120,000 |
There is presently no centralized SME investment information hub. This disadvantages SME investments, and creates an opportunity for radical improvement in the infrastructure for SME financing at relatively low cost. The Financial Alliance for Sustainable Trade (FAST) aims to create an information platform which would be flexible enough to join different data sources in a single transparent environment. The innovation of the system would be in addressing the SME impact investment sector not previously covered by similar interventions and where FAST already has an information advantage. FAST expects that by 2015 some 200 financial service providers would be able to take advantage of the information platform. Through its member organizations, FAST further expects to reach out to some 600 SMEs, which would potentially benefit from improved access to this information hub. |
Commencement of Processing and Milling of Castor Seed into Castor Oil and its By-products |
| CFC financing USD 58,500 (Nigeria) |
The Tranquil Mazabs Farms Ltd aims to produce and process castor seeds at a large scale in Nigeria. It currently owns a 40ha plantation, the seeds of which are seemingly sold to traders for export. The objective of the investment plan is to expand production of the seeds on a 1000ha farm and to establish a unique processing facility in Nigeria for seed processing (oil extraction and byproducts). The CFC’s support aims at supporting initial technical analysis, in particular with regard to the envisaged expansion of production, introduction of improved planting seeds and production methods, and subsequent quality analysis of the oil obtained after trial processing. This should provide a more sound perspective for the potential of up-scaling of the activities. |
Autonomous and Sustainable Cocoa and Coffee Production by Indigenous Askaninka People |
| CFC financing USD 120,000 (Peru) |
| Rainforest UK is working with a local NGO CARE (Central Ashaninka del Rio Ene) to provide support to indigenous people enabling them to manage and control their own lands and take part in the management of local protected areas. Focus with regard to income earning activities, which are in line with the cultural and environmental context, is on cocoa and coffee production. The current project aims to strengthen this process targeting increased production volumes, improved quality of production and more secured market access, resulting in expected income increases of approximately 30% by 2015 (starting from family income levels of around USD 300/year). The CFC contribution of USD 120,000 will be used to complement other funding sources. |
Cotton Contamination Regional Seminar |
| CFC financing USD 67,500 (West Africa) |
| The project entails the organization of a regional workshop, as follow-up to a completed project on the prevention of seed cotton contamination. It is proposed to be a two day workshop, bringing together lead stakeholders in the project to review project experiences and results, and to discuss and develop appropriate strategies to add value to cleaner cotton, such to the benefit of all parties in the supply chain. The workshop was held on 28th & 29th of April 2014 in Bobo-Dioulasso, Burkina Faso. The report of the meeting will be placed on the website. |