KAMPALA – The Yield Uganda Investment Fund has given Shs 5.14 billion to Central Coffee Farmers Association Ltd (CECOFA), a farmer-owned primary coffee processor.
According to Yield, the fund is on schedule to close a further two agri-business investments over the remainder of the year 2018.
This is the second investment by Yield Uganda Investment Fund, set up with financing from the European Union (EU) through the International Fund for Agriculture Development (IFAD) and National Social Security Fund Uganda (NSSF), managed by Pearl Capital Partners (PCP).
Dr Edward Isingoma Matsiko, PCP Managing Partner said with this investment from Yield Fund, they believe CECOFA will be able to increase its trading volumes and efficiency levels in its operations and expansion plans.
The business has enormous growth potential with increased purchases from smallholder farmers who will benefit economically from both certified and standard coffee
He revealed that the investment aims at increasing the company’s capacity to source and export larger volumes of Robusta coffee from smallholders as well as increase the number of certified smallholder farmers.
“And alongside Yield Fund’s investment, CECOFA will receive Business Development Support aimed at enhancing the technical and governance facets of the business, with the aim of enabling growth and self-sustenance in the future.,” said Dr Isingoma October 15.
CECOFA is a primary processor of coffee that collects dried coffee beans (Kiboko cherries) from its network of approximately over 3,600 smallholder farmers organized through a co-operative structure.
The beans are then cleaned, de-husked and graded into Fair to Average Quality coffee by CECOFA. The company, therefore, provides market access for farmer members by purchasing, aggregating and collectively finding a market through international coffee traders.
Mr Ronald Buule, CECOFA Executive Director said they are expected to increase their impact on smallholder farmers particularly, women and youth by supporting them to attain Fairtrade and 4C certifications which will in turn, give them better price outcomes and economic empowerment.
He explained that the investment aims at increasing the company’s capacity to source and export larger volumes of Robusta coffee from smallholders as well as increase the number of certified smallholder farmers.
“We are excited about the start of our long-term partnership with Yield Fund. This investment will enable us to operate more efficiently and more so increase our export volumes of Robusta certified coffee,” said Mr Buule.
H. E Attilio Pacifici, the European Union Ambassador to Uganda retaliated the EU commitment to support the Private Sector in Uganda.
“The second investment of Yield Fund is a practical example of the implementation of the EU External Investment Plan which aims to promote inclusive growth, job creation and sustainable development in Africa. CECOFA is, therefore, accessing long-term capital and technical assistance required for the expansion of their business”, he said.
Mr Lakshmi Moola, the IFAD Country Programme Manager for Uganda and Board Member of the Yield Fund said smallholder Farmers are at the core of IFAD’s mission and that farmer-owned institutions, like CECOFA, are the types of institutions that were envisaged for investment when setting up the Fund.
He explained that as an Impact Investor, Yield is proud to be associated with the business which has an exceptional impact on the livelihoods of numerous smallholder farmers within central Uganda.
“And we expect CECOFA to generate considerable volumes of coffee exports with support from our investment,” he said.
Mr Richard Byarugaba, the Managing Director NSSF said the Fund’s participation in this sector presents them with an opportunity to contribute towards economic growth by alleviating poverty and enhancing food security.
“And we believe the Yield Fund is the best vehicle we can use to have exposure to the agricultural sector that is currently starved of long-term financing, which when made available can stimulate value-adding activities,” said Mr Byarugaba.
“We welcome this new investment, and the potential within the company to grow to further enabling a stable and sustainable market for the smallholder coffee producers in Uganda.” said
“We are cognizant of the fact that the agriculture sector contributes 24 percent of GDP, accounts for over 50 percent of the country’s export revenues, and employs 40.9% of Uganda’s working population,” Mr Byarugaba added.
He explained that they are pleased that CECOFA has qualified for part of the 2 Million Euro financing that we put aside towards the yield fund and that more so because over 3,600 farmers in the value chain stand to benefit from the same investment. Ends
About Yield Uganda Investment Fund
The Fund was launched in January 2017 with commitments of €12 million, anchored by €10 million from the European Union (EU) through the International Fund for Agricultural Development (IFAD), and €2 million committed by National Social Security Fund Uganda (NSSF). The Fund offers innovative financial products such as equity, semi-equity and debt funding. Additionally, an integral and complementary part of the Fund’s investment process will be used to support the operations of its investee companies through matching grants for Business Development Support (BDS) funded by the EU.
About the European Union:
The European Union (EU) is a political and economic union of 28 Member States. They decided to link together their know-how, resources and destinies. Together, they have built a zone of stability, democracy and sustainable development whilst maintaining cultural diversity, tolerance and individual freedoms.
The EU is committed to sharing its achievements and values with countries and peoples beyond its borders. And in fact, over half of all development aid comes from the EU and its Member States, making them collectively the world’s largest aid donor. Most aid goes to low-income and least developed countries. About National Social Security Fund (NSSF) Uganda, The National Social Security Fund (NSSF) Uganda is a multi-trillion Fund mandated by Government through the NSSF Act, Cap 222 (Laws of Uganda) to provide social security services to employees in the private sector.
NSSF is the most profitable, trustworthy, efficient, secure, innovative and dynamic social security provider that guarantees safety, security and a competitive return on members’ savings, delivering an annual return of investment of over 2% above the 10-year inflation average. The Fund manages assets worth over UGX 9.98 trillion invested in Fixed Income, Equities and Real Estate assets within the East Africa region. As the largest Fund in East Africa by value, we have the ambitious goal of growing our Assets Under Management to 20 trillion by 2025. Since 2012, the Fund is regulated by the Uganda Retirement Benefits Regulatory Authority while Minister of Finance, Planning and Economic Development is responsible for policy oversight.
The International Fund for Agricultural Development (IFAD) invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, IFAD has provided about US$20.4 billion in grants and low-interest loans to projects that have reached some 480 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.
About Pearl Capital Partners
Pearl Capital Partners group is an independent investment management company with offices across Uganda, Kenya and Mauritius. Since its formation in 2005, PCP has invested in 40 agribusinesses in 7 Sub-Saharan countries including Uganda in ranges of USD 100,000 to USD 2.5 million. Over the past dozen years, the PCP team has moved from being a pioneer impact investment firm to commanding considerable knowledge and experience in the agricultural impact and investment space in the East African region.