IFC invests US$55.9M in Habesha Breweries, boosting Ethiopia’s barley industry

ETHIOPIA — The International Finance Corporation (IFC) has extend US$55.9 million financing to Habesha Breweries S.C., a beverage manufacturer in Ethiopia to help the company expand its operations and increase local barley sourcing from smallholder farmers.

The loan is co-funded by the Dutch development bank (FMO) and Dutch banks Cooperative Rabobank U.A. (Rabobank) and ING Bank N.V. (ING Bank).

According to IFC, Ethiopia’s brewing industry is fast growing and an important contributor to economic growth, but the sector imports as much as 90% of its malt barley needs.

“Programs that support local sourcing are critical to linking smallholder farmers to large supply chains, thus creating more economic opportunity and jobs for vital parts of the country’s agriculture sector,” said Jumoke Jagun-Dokunmu, IFC’s regional director for Eastern Africa.

“Our partnership with IFC and other lenders is timely and key to growing the malt barley supply chain in Ethiopia,” said Zewdu Negate, chief executive officer of Habesha Breweries.

The company revealed they are planning to increase smallholder farmers patnership from 1,000 to 14,000 in the next five years which will in turn improve household incomes.

In addition to the financing, IFC and FMO will help Habesha support farmers’ access to improved seed varieties and other agricultural inputs and provide best practices on agronomy and business management.

“Increasing farmer access to improved agricultural inputs such as seeds and fertilizers and building the agronomic and technical capacity of local, smallholder barley producers in Ethiopia will create more jobs and higher efficiency,” said Linda Broekhuizen, chief investment officer of FMO.

The project is expected to boost income for 15,000 smallholder barley farmers, double farm yields of participating barley producers and create 500 jobs.

In November 2019, IFC in partnership with the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP) announced a US$22.33 million (€20 million) investment in Soufflet Malt Ethiopia to help the company build and operate a malting plant in Ethiopia.

The greenfield investment is aimed to help Soufflet Malt Ethiopia, a subsidiary of French company Groupe Soufflet, modernize Ethiopia’s malt supply chain and boost local production of the key beer ingredient.

According to the IFC, the malting plant, in Addis Ababa’s Lemi Industrial Park, is expected to produce 110,000 metric tons of malt annually.