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 Josť
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.
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
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.