Aldea Coffee S.A.
BIO has granted a USD 4 M loan to Aldea Coffee, a Nicaraguan coffee producers' association.
Amount
$ 4,000,000.00
Type of investment
Debt
Development impacts
- Local economic growth
- Private sector consolidation/innovation
- Food security & rural development
- Promotion of ESG best practices
Beneficiary locations
Investment field
Enterprises
Activity
Aldea Coffee and its sister companies, all together called “Familia Aldea”, are a producers’ association (similar to a Cooperative) located in the North Central Region of Nicaragua. The Association groups 13,042 producers of basic grains, vegetables, and fresh products in 8 municipalities, of which 3,280 are coffee producers.
Aldea Coffee is currently building a coffee processing plant, which will reach a total capacity of 17k tonnes at completion. With this project, Aldea aims at taking full control of the transformation process from cherry to green coffee and commercialisation.
The Familia Aldea has three main activities: microcredits, sale of quality agricultural inputs and coffee processing and commercialisation services. Within Familia Aldea, Aldea’s Foundation provides technical assistance to associates.
Development impacts
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Local economic growth
Net export effects
Support to the coffee sector that is economically and socially crucial to Nicaragua, as a top 5 export product contributing over 20% of agricultural GDP and providing about half of all agricultural jobs in the country.Promote an inclusive export-oriented association that is a leading exporter of coffee in Nicaragua, sourcing coffee from SHF, of which 38% is certified.
Support local-value-added creation through increasing processing capacities and standards - exporting from 60% to 85% of speciality coffee, as well as through improvements in agricultural practices and better services for its members.
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Private sector consolidation/innovation
Know-how and technology transfer
Aldea Coffee will be able to increase the standardisation and quality of the finished product by improving post-harvest handling, increasing efficiency, preparation, and transformation of cherry coffee to golden grain. The processing plant will include machinery not common in Nicaragua and will be automatised, which will improve efficiency in the production.Market structuring effects
This project is expected to increase the standardisation and quality of the finished product by improving post-harvest handling, increasing efficiency, preparation, and transformation of cherry coffee to golden grain.
The use of state-of-the-art information technology with sensors will allow different coffee bean drying profiles to match buyers' preferences, allowing Aldea to sell the coffee at a better price.
Value chain integration as new wet mill technology allows integrating management of the coffee processing from cherry to green coffee beans for export, bringing innovation to the coffee processing in the region and to the associates. -
Food security & rural development
Improve economic opportunities for up to 30,000 smallholder farmers with positive indirect effects on the local economic activity.
Large range of services to members i.e., working capital loans through its microfinance segment, sale of agricultural inputs, commercialization of coffee, and technical assistance.
Aldea Cert provides technical assistance and trainings to coffee producers with the main objectives of improving coffee productivity and quality, which in turn improve the income of the producer and its competitiveness. Also created a high-tech app that allows to identify diseases and how to treat them and for adaptation to climate change.
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Promotion of ESG best practices
Promotion of good social practices
BIO's ESAP will require Aldea to take actions to improve some aspects related to labour, working conditions and health and safety. Aldea also has an internal certification process that promotes best practices and is aligned with external Fairtrade and Rainforest alliance certifications. They are promoting this certification with a small economic incentive on the coffee price and are currently at 60% of the total associates producing coffee. They also promote organic certification (around 10%) but the growth is dependent on the market for organic coffee
E&S Impact
The Familia Aldea will continue the development of an Environmental Management System and will include social aspects into it to create a complete Environmental and Social Management System.
Situation at the time of investment
The Familia Aldea has overall good management practices; they have a good relationship with employees and associates, and there are no major red flags. The main risk is the lack of emphasis in Occupational Health and Safety during construction and handling of dangerous agro-chemicals. Deforestation risk is high, although it is managed by the company.
Risk Category: B+
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Investment Companies & Funds
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