On February 6, 2017, MIGA issued guarantees of $5.6 million to Sucafina Holding S.A. of Luxembourg, Millco Ltd. and Cofco Ltd. of Mauritius (the Investors) covering their equity, shareholder loans and retained earnings invested in Budeca SA, Bugestal SPRL and Bucafe SU (the Project Enterprises) in Burundi. The $5.6 million guarantees will cover the equity, shareholder loans and retained earnings for a period of up to 10 years against the risks of transfer restriction, expropriation, war and civil disturbance.
The project will support the existing operations of three companies that procure, process and export coffee beans in Burundi. MIGA’s support would allow the Investors to continue to invest, upgrade and rehabilitate the Project Enterprises. The project falls under the category of small and medium-sized enterprises (SMEs), which play a critical role in Burundi’s economic development.
MIGA’s additional coverage would be underwritten through MIGA’s Small Investment Program.
The project is a category B under MIGA’s Policy on Environmental and Social Sustainability. The project consists of three companies; Bugestal that operates coffee washing stations and Budeca and Bucafe that operate dry mills.
The key environmental and social (E&S) risks related to the project include liquid and solid waste management, degradation of water quality and workers and communities’ health and safety in and around the project sites, and monitoring of its supply chain (e.g., potential for child labor, deforestation).
Sucafina has in place an E&S policy that is being rolled out to Bugestal, Bucafe and Budeca and an Environmental and Social Management System (ESMS) Manual in line with ISO14001 requirements. The ESMS will be reviewed and updated to ensure that the existing procedures and plans target the activities carried out by Bugestal, Bucafe and Budeca. Additional environmental and social information related to the project is available here.
The project will continue to strengthen the competitiveness of Burundi’s coffee sector, support economic livelihoods in the Burundi coffee supply chain—particularly for smallholder farmers—and provide permanent job opportunities, including women who make up the majority of staff. Additionally, the project will provide increased tax revenues for the government.
MIGA’s support for the investment is aligned with the Agency’s strategy of supporting investments into conflict-affected countries eligible for concessional financing from the International Development Association.
The project is also aligned with the World Bank-IFC’s Coffee Sector Competitiveness Project to increase coffee productivity and improve the quality of small-scale growers in Burundi.