JICA funds coffee project in Vietnam

The Japan International Cooperation Agency (JICA) agreed to loan $75 million to Caf Outspan Vietnam Limited (COVL), a subsidiary of Olam International Limited focused on soluble coffee manufacturing, for the Coffee Value Chain Enhancement Project.  The agreement was signed on 28 March 2018.

The Asian Development Bank (ADB) is also co-financing the project with $88 million in total with OIL and COVL.

(Photo: Dreamstime)

The loan will be for expanding the COVL coffee processing plant and will contribute to the agricultural development and the advancement of Vietnam’s coffee industry through enhancing the coffee value chain. Vietnam is the second largest coffee producer in the world accounting for about 17% market share, and is also the largest producer of Robusta, which is well-suited for soluble coffee.

Olam will improve inclusive and sustainable agricultural value chains that will benefit up to 20,000 smallholder farmers in Vietnam, as well as in Indonesia, Papua New Guinea and Timor-Leste.

Based in Singapore, the agribusiness company has presence in 70 countries and 4.3 million smallholder farmers network.

The coffee project will advance the agricultural product processing industry, which is positioned by the Government of Vietnam as a strategic priority toward becoming an industrialized country, and reduce poverty through farming supports to smallholder farmers, thereby contributing to Sustainable Development Goals (SDGs) 2 (sustainable agriculture) and 9 (inclusive and sustainable industrialization). It is JICA’s first private finance transaction co-financed with ADB (except for LEAP Fund*). It is also the first agriculture sector project supported by JICA private sector investment finance since its recommencement in 2012. JICA will continue to enhance partnerships with development financial institutions and will proactively promote the private initiative for socioeconomic development in developing countries.

* The Leading Asias Private Infrastructure Fund (LEAP Fund) is a trust fund established by the ADB for supporting private infrastructure investment across Asia and the Pacific.