THIS PRESENTATION WILL…. Provide a brief update on the new operational policies of the CFC Highlight CFC’s expectations from the Project CFC/ICO/45
WHAT IS THE COMMON FUND FOR COMMODITIES ? Inter-governmental development financial institution established by the United Nations Started in 1989 and based in Amsterdam, The Netherlands 105 member countries and 10 regional Inter-Governmental Organisations
CFC REFORM NECESSARY BECAUSE OF …… Changed context since its establishment, Gap in its administrative cost coverage due to falling revenues Lack of financial resources to sustain project financing functions, and Need to align the capacity of the organization to make it financially sustainable.
KEY FEATURES OF CFC’S PROJECT SUPPORT To realize the potential of commodity production, processing, manufacturing, and trade for the benefit of commodity producers through practical measures that are: commercially viable financially sustainable Scalable have a broad developmental impact on stakeholders
KEY OBJECTIVES OF PROJECT SUPPORT to create employment with special reference to youth and women increase household incomes reduce poverty enhance food security
GUIDING OPERATIONAL PRINCIPLES Upon request or with active consultations formulate and execute programs in the commodity sector for governments, investors, NGO’s; Invite calls for ideas for solutions and activities for commodity development in identified spheres; Offer, through risk sharing, with governments, international organizations and new partners, financial instruments which will generate returns on investment;
GUIDING OPERATIONAL PRINCIPLES Assess the social and economic investment consequences of each intervention undertaken; Involve private sector representatives, (NGO’s and knowledge institutes) as advisors on strategy, operational capacity, disseminators of results and ambassadors for the organization (private sector platform);
GUIDING OPERATIONAL PRINCIPLES Take advantage of lessons learned and skills acquired to replicate successful interventions; and Operate as a paid service provider
TYPES OF FINANCING Loans including Lines of Credit Returnable grants Equity Guarantees Limited grant funding to support income generating activity on an exceptional basis
SIZE OF INTERVENTIONS Range of CFC Contribution: Projects targeting specific commodity issues - USD 60,000 to USD1,500,000 Grant funding- USD 60,000 to USD 500,000
PROSPECTIVE CLIENTS Likely CFC clients would be: profit making organisations social enterprises operating in the commodity sector
KEY TARGET AREAS CFC will target its support at each link in the commodity value chain i.e increasing production and productivity enhancing value addition increasing access to markets reducing risks by financing innovative measures and actions
TYPES OF PROJECTS Typical CFC financed projects would include: Input provisions Production Processing Marketing Product market development
PARTNER INSTITUTIONS Likely CFC partner organisations would be: bilateral and multi-lateral development institutions Cooperatives and producer organisations, Small and medium enterprises Trading companies Investment Funds with complementary target activities
APPLICATION PROCESS CFC issues periodic “Call for Proposals” outlining the documentation required All interested parties including ICBs (on behalf of their members) can respond to the Call All proposals received will be subjected to a common approval process.
18 SPECIAL NOTE ON CFC/ICO/45 PROJECT TITLE OF THE PROJECT: Building Capacity for Coffee Certification and Verification in Eastern Africa SUPERVISORY BODY:International Coffee Organization DURATION:5 Years LOCATION:Burundi, Ethiopia, Kenya, Malawi, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe NATURE OF PROJECT: Building capacity within Eastern Africa and beyond towards sustainable agricultural practices in the coffee sector. TOTAL COST:USD 4.6 M CFC FINANCING:USD 2.0 M CO-FINANCING:USD1,500,000 (from EU/AAACP) COUNTERPART CONTRIBUTION:USD 1.1 M PROJECT EXECUTING AGENCY: EAFCA COLLABORATING INSTITUTIONS: National Coffee Institutions, EAFCA membership, Government Ministries in charge of coffee, and Coffee Research Centres in the participating countries
19 SPECIAL NOTE ON CFC/ICO/45 PROJECT Broad Project Goal To enhance incomes of coffee farmers by increasing the quality and quantity of certified/verified coffee produced and processed within the Eastern and Southern African coffee producing countries, through a process of building the capacity within the region for sustainable agricultural practices in the coffee sector. Project Objectives Build capacity within national coffee institutions to undertake training in sustainability practices Build capacity of farmers to produce coffee in a sustainable manner Build capacity of professional certifiers/verifiers within the first four years of the start of project Register a 25% increase in regional coffee exports that are certified/verified by year five Increase quality and quantity of certified/verified coffee for farmers participating in the program by year five Attain a stable market access for farmers engaged in sustainable production
20 CFC’S RECOMMENDED AREAS OF EMPHASIS Stricter focus on Project impact eg. Impact of training on certifiers. Project needs to show how trained personnel are being utilised towards project objectives Impact of training on farmers Impact of project on coffee production practices Impact of project on coffee quality Impact of project on market/market potential
CLOSING REMARKS CFC looks forward to continued collaboration in the successful implementation of CFC/ICO/45 Coffee will continue to represent important commodity in keeping with new focus of CFC because of the multifunctional role associated with coffee cultivation and processing which affords social and economic benefits that are consistent with CFC objectives CFC looks forward to capitalising on past grant funded assistance to coffee to finance profitable income generating activities with benefits for all stakeholders.