IFC supports Mercon Group to strengthen the coffee sector in Latin America, promoting sustainability and inclusion
- 28 May 2021
Published by IFC
The International Finance Corporation (IFC), a member of the World Bank Group, renews its partnership with Grupo Mercon to strengthen the company's operations in Central America and to support coffee producers within the coffee value chain, particularly in Nicaragua, Honduras, and Guatemala, where the coffee sector is an important contributor to the economy of the country.
The investment of up to US$55 million seeks to improve the productivity of the coffee sector, promote the sustainability of its businesses, and protect jobs in rural areas, driving the recovery and growth of the region. The financing is part of a $500 million regional syndicated credit facility, structured, managed and managed by Rabobank and incorporates financing of up to $14.85 million from the IFC-backed Global Food Agriculture and Security Program (GAFSP).
Coffee in Central America is the second largest export, producing more than 10% of the world's exported coffee and generating around 2 million jobs in the region. More than 90 percent of Mercon's coffee suppliers are small and medium-sized producers in rural towns. Mercon has been the largest exporter of coffee over the past seven years in Nicaragua, accounting for 35% of the country's coffee exports.
The investment therefore has a strong focus on facilitating access to financing, which is critical to poverty reduction and improving the quality of life of coffee communities, particularly at a time of limited liquidity due to the COVID-19 pandemic. The project will also enhance climate-smart practices to reduce crop losses, improve efficiency and reduce greenhouse gas emissions.
IFC will work with Mercon on a project focused on increasing the productivity and quality of Robusta's supply chain in Nicaragua with the objective of making it environmentally friendly, developing specific technical content for Robusta, supporting financial education to complement the LIFT program in Nicaragua's Caribbean region, digitizing training for small producers, among other objectives. This project will also be supported by the Private Sector Window of the Global Food Agriculture and Security Program (GAFSP).
The price of financing could include a discount based on compliance with sustainability performance indicators, which will benefit both Mercon's LIFT program, which is focused on improving productivity and incorporating environmental and social sustainability practices into coffee production, as well as the Seeds for Progress Foundation, which contributes to the overall well-being of coffee communities.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
The Global Agriculture and Food Security Program (GAFSP) is a global effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The Private Sector Window, managed by IFC, and supported by the governments of Australia, Canada, Japan, the Netherlands, the United Kingdom and the United States, provides long- and short-term loans, credit guarantees, equity, and technical assistance to private sector companies and financial intermediaries. It links smallholder farmers to markets by improving their access to finance, technology, expertise and inputs.
Mercon Coffee Group is a vertically integrated global green coffee supplier, committed to consistently providing the right quality of coffee to customers creating well-being in coffee communities based on sustainability. Founded in 1952 as a coffee export company, Mercon's headquarters are located in the Netherlands and is among the top 10 coffee suppliers in the world, providing tailor-made services to its customers in more than 60 countries from its offices located in the Americas, Europe, Africa and Asia. Mercon is a leader in sustainability and drives a number of initiatives, including its LIFT program that focuses on innovation and prosperity in coffee communities around the world.
In addition, Mercon actively supports Fundación Semillas para el Progreso, a non-profit organization that aims to improve education to help the growth of tomorrow's coffee communities. Mercon has built an integrated coffee supply chain, recognized for excellence in commercial and specialty coffees, as well as for its operations in agriculture, production, export, logistics and risk management. For more information visit: merconcoffeegroup.com.