WASHINGTON, DC, Mar. 2, 2017—The Multilateral Investment Guarantee Agency (MIGA) announced guarantees of US$5.6 million last month in support of Sucafina Holding SA (Sucafina), Millco Ltd and Cofco Ltd equity investments and shareholder loans against the risk of Transfer Restriction, Expropriation, War and Civil Disturbance and Temporary Business Interruption into three existing coffee operating companies in Burundi.
Budeca SA, Bugestal SPRL and Bucafe SU—the coffee operating companies—purchase coffee cherries from smallholder farmers across Burundi, and then pulp, clean and dry the coffee beans for distribution in local and international markets. Currently, more than 50 percent of the company's workforce is female.
As part of the Government of Burundi's initiative to privatize the coffee sector, the coffee operating companies will continue to provide smallholder farmers with rising income, new employment opportunities within the value chain, as well as enhance the country's export capabilities and increase its foreign exchange revenues.
"Burundi has the potential to increase its market share and profits by improving the quality of its coffee. The private sector can play a crucial role in enhancing Burundi's coffee production and helping the country maintain its position in the global market," said MIGA Executive Vice President and CEO Keiko Honda.
In addition to having the world's most ideal climatic conditions for the production of Arabica coffee, the sector is estimated to support the livelihood of over 30 percent of the population in Burundi. Supporting the sustainable development of coffee production is therefore crucial to addressing poverty in the country.
"We are proud to expand our coffee operations across Burundi and continue to provide smallholder farmers with the skills and training they need to produce sustainable and high quality coffee, especially since coffee production plays an important role in the national economy" said Nicolas Tamari, CEO of Sucafina.
MIGA's support for the coffee operating companies aligns with the World Bank-International Finance Corporation's Coffee Sector Competitiveness Project for Burundi, which aims to increase coffee productivity and improve the quality of small-scale coffee growers in the country. It also supports the Government of Burundi's 2009 initiative to privatize all coffee operations and increase the country's competitiveness in the coffee sector while lifting people out of poverty.
MIGA's Small Investment Program (SIP) is designed to facilitate investment into small and medium enterprises (SMEs) in various sectors. Investments are eligible for coverage under SIP if they are related to the establishment of an SME, or made into an existing SME, in a developing member country.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people's lives. MIGA fulfills this mandate by offering political risk insurance and credit enhancement to investors and lenders.
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