Oikocredit invests $ 5.9 million in Nicaraguan agroforestry company

Oikocredit invests $ 5.9 million in Nicaraguan agroforestry company

Global equity team.jpg

Oikocredit's global equity team

08 February | 2016

Global impact investor, Oikocredit, has invested US$ 5.9 million in Cafetalera Nicafrance SA (Nicafrance), as part of a US$ 13.3 million co-investment with the Moringa Partnership.

Nicafrance is an agroforestry company specialized in the production of high-quality certified coffee and timber in Nicaragua’s Matagalpa department.

Nicafrance is a unique example of an agroforestry system combining coffee plantations with native and precious tree species that are sustainably harvested. Shade grown coffee represents a small, but growing portion of the coffee market.

The co-investment will help Nicafrance to develop an ‘out-grower program’ for a cluster of small and medium-sized coffee farmers in the area. The 1,700 hectare project will improve the resilience of an area affected by global warming.

The out-grower program will provide capital and technical assistance to help rehabilitate small farms affected by coffee rust, as well as support to develop sustainable logging by smallholder farmers.

With the introduction of the out-grower program, Nicafrance will build a coffee cluster, producing around 5,000 tonnes of specialty coffee per year for high-end roasters in Europe, the US and Asia, which will fetch a premium that will contribute to the company’s social initiatives.

Oikocredit equity deputy director, Tom Keleher, said that Oikocredit is proud to have Nicafrance as part of its investment portfolio.

“Nicafrance is a company that makes a significant impact on the local community, creating up to 6,000 permanent and seasonal jobs, and providing healthcare, transportation, housing and education to its workers and their families,” said Keleher.

“The US$ 5.9 million investment by Oikocredit marks the beginning of a long-term partnership, which will see Oikocredit take a seat on the board to provide strategic guidance, governance experience and an opportunity to leverage from Oikocredit’s global network of agricultural partners and suppliers,” he added.

The region that Nicafrance operates in has been severely affected by the coffee rust outbreak in 2012-2013 which crippled production and threatened the livelihoods of the area’s low-income earners which are dependent on the industry.

Founded in 1992 by Clément Marie Ponçon, Nicafrance has grown to become one of the biggest coffee farms in Central America, supplying large international roasters and leading coffee brands.

Short video on Nicafrance

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