Managua
,
Nicaragua, March 26, 2014
—IFC, a member of the World Bank Group
,
and the Global Agriculture and Food Security Program (GAFSP) will provide a combined US$10 million to help two leading coffee exporters in Nicaragua and Honduras expand their operations and provide long-term financing to local coffee producers, supporting the creation of jobs in rural areas.
IFC will provide a US$7 million loan to Comercial Internacional Exportadora (CISA Exportadora) in Nicaragua and its sister company Mercon Honduras (CIGRAH) as part of an initiative to increase productivity by expanding de-hulling, sorting, and storage infrastructure. Both companies belong to Mercon Coffee Group
.
GAFSP’s US$3 million loan will help CISA provide long-term financing for its coffee suppliers, allowing them to renovate or expand coffee plantations, acquire technology and machinery, and improve their agricultural productivity. CISA has more than 7,000 suppliers in Nicaragua, of which approximately 89 percent are small producers with less than 20 hectares. Availability of long term financing for these small producers is limited, though coffee is a top export and significant source of employment in rural areas. Coffee represents 3 percent of Nicaragua’s GDP and generates 15 percent of the country’s total employment.
“Agribusiness plays a vital role in economic development. IFC has made it a priority as part of its commitment to help reduce poverty and improve peoples’ lives,” said Oscar Chemerinski, IFC Director of Manufacturing Agribusiness and Services for Latin America Caribbean and Africa. “This investment will benefit rural coffee producers, supporting farming communities and helping develop this critical supply chain.”
IFC’s investment also comes during a challenging period for Central America’s coffee industry. Beginning in late 2012, a fungal epidemic of coffee leaf rust known as Roya has affected up to 40 percent of the coffee fields in Honduras and Nicaragua.
"The Mercon Group, through CISA Exportadora and Mercon Honduras, is very proud to be able to sign this $10 million loan with IFC,” said José Antonio Baltodano, President of Mercon Coffee Group. “This demonstrates confidence, not only in our group, but also in Nicaragua and Honduras. This operation has enabled us to modernize our operations by implementing measures which are friendlier to the environment and have a greater social impact. We hope that other companies will follow this example."
In the past five years, IFC has increased its portfolio of investments in Central America by 34 percent, with US1.6 billion invested in 91 projects in this region by the end of February 2014
.
In agribusiness, IFC‘s strategy aims to promote inclusive growth and environmental and social sustainability in agricultural supply chains. Globally, IFC’s investments in agribusiness reached $4.5 billion in 2013.
GAFSP is a global effort to aid vulnerable populations afflicted by hunger and poverty. It takes up where emergency and recovery assistance leaves off, targeting transformative and lasting change in agriculture and food security within poor countries. Following commitments by G-8 leaders at the L’Aquila Summit in July 2009 and reaffirmed by the G-20 Summit in Pittsburgh in September 2009, GAFSP was established in April 2010. IFC manages the GAFSP private sector window and World Bank’s International Bank for Reconstruction and Development manages the public sector part of the program. Donor partners to the GAFSP private sector window are Canada, Japan, the Netherlands, the U.K. and the U.S. This funding makes it possible for IFC to invest in riskier projects with strong potential to promote food security and reduce poverty. For more information, visit
http://www.gafspfund.org
.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
About Mercon Coffee Group
Mercon Coffee Group (MCG) is one of the top ten coffee trading companies in the world with a presence in Nicaragua, Honduras, Guatemala, Brazil, Vietnam, the United States and Spain. CISA Exportadora (Comercial Internacional Exportadora S.A.), based in Nicaragua, and Mercon Honduras (CIGRAH) are two coffee origin companies of MCG.
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