EAST AFRICA – International Finance Corporation (IFC), a member of the World Bank Group, and Absa Group Limited, a South African-based bank, have joined forces to offer a commodity trade finance facility of up to US$60 million to Volcafe, a leading global green coffee merchant.  

This initiative aims to bolster Volcafe’s operations in East Africa and support tens of thousands of coffee farmers in the region. 

The financing will primarily serve as working capital to facilitate various stages of the coffee value chain, including the purchase of coffee cherries from smallholder farmers and local traders, as well as the processing, storage, and transport of coffee to export ports. 

East Africa stands as a significant coffee-growing region, contributing over 80 percent of the continent’s production and 10 percent of the total global coffee production.  

Approximately five million smallholder farmers rely on the coffee industry for their livelihoods in the region.  

However, many of these farmers lack access to essential financial support, and their crop production is often affected by the unpredictable impacts of climate change. 

Through this one-year facility, with Absa and IFC each contributing up to US$30 million, Volcafe aims to provide market access to more than 75,000 coffee farmers.  

The financing will also support training programs on sustainable production techniques and good agronomy practices through the long-running Volcafe Way program, thereby enhancing crop resilience and profitability. 

Melvin Wenger Weber, Volcafe’s Chief Financial Officer, expressed enthusiasm for the collaboration, emphasizing the potential it holds for the development of East Africa’s coffee sector.  

He said, “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.” 

In addition to facilitating the purchase of coffee cherries, the facility will enable Volcafe to acquire green coffee beans from established auction systems, further enhancing its market presence. 

Tshimbi Ntuli, Director of Structured Trade and Commodity Finance at Absa Corporate and Investment Banking, underscored the significance of the collaboration in supporting Africa’s growth and development.  

He emphasized Absa’s commitment to meeting the evolving needs of its clients and highlighted the bank’s strategic vision in partnering with development finance institutions. 

As part of the agreement, Volcafe is aligning its operations with IFC’s Performance Standards, with a focus on biodiversity and natural resource management.  

This includes conducting biodiversity risk assessments in its arabica and robusta supply chains in partnership with The Biodiversity Consultancy, a global provider of biodiversity management services. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industryHERE