World Bank to Support Ethiopian Coffee Growers
The private investment arm of the World Bank, International Finance Corporation (IFC), has announced its commitment to a loan guarantee facility, valued up to US$30 million, to bring financial assistance to Ethiopia’s coffee industry.
The initiative, supplied through the country’s Nib International Bank SC (NIB), is expected to support an extra 70 coffee cooperatives during its first year and the production of an additional 3,542 metric tons of coffee beans, as well as 2,000 jobs, over a three year timeframe, according to a new IFC statement.
Under the guarantee, NIB will be in a position to award loans to the value of US$12.5 million for the 2010 coffee harvesting period, with this figure anticipated to be doubled, or more than doubled, to US$25-30 million, by 2013.
Commenting on the implications of the financial backing, NIB president, Amerga Kassa, said, “This facility reduces NIB’s financial risk of lending to coffee-farmer cooperatives and will go a long way to strengthen NIB’s commitment to expand support to small farmers in the coffee sector in Ethiopia.”
As Africa’s largest coffee producer, Ethiopia generated US$528 million from its coffee exports during the year to 7 July 2010, according to data from the Ministry of Trade and Industry. With the aid of the new agreement, it is anticipated that cooperatives will be able to enjoy as much as a 30 per cent increase in their income, through the assisted purchase of production equipment, as well as the much needed working capital.