The Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA) today signed $163 million in loan agreements with Olam International Limited (OIL) and Café Outspan Vietnam Limited (COVL), a subsidiary of OIL. The loans will help improve inclusive and sustainable agricultural value chains, directly benefiting up to 20,000 smallholder farmers in Indonesia, Papua New Guinea (PNG), Timor-Leste, and Viet Nam.
ADB's assistance includes a $83 million loan to OIL and a $5 million loan to COVL. The project is ADB's first nonsovereign assistance directly cofinanced by JICA, which will lend $75 million to COVL.
"Developing formal value chains is essential for farmers in Asia and the Pacific to integrate with the global economy and increase the value of their products," said ADB Investment Specialist Juhyun Jeong. "ADB and JICA's partnership with OIL and COVL will help smallholder farmers expand their production and operations, improving livelihoods by promoting inclusive and sustainable development."
"Olam's comprehensive and grassroots approach to improve agricultural value chains brings significant positive impacts to farmers and the agribusiness industry," said JICA's Investment Officer Gyo Shibata. "For the partnership with ADB's private sector operations, we are excited to ink the first direct co-financing deal and explore further collaborations."
"This loan agreement underpins the mutual aims of Olam, ADB, and JICA to support the economic prosperity of farmers as well as help them become stewards of the environment—essential for the future of agricultural production," said Prakash Jhanwer, Regional Head for South East Asia at Olam International.
The Agricultural Value Chain Development Project will support OIL's $211 million investment plan until 2019 by financing an expansion in the firm's processing of midstream products, while providing permanent working capital investments for smallholder farmers, particularly in Indonesia (coffee and cocoa); PNG (coffee and cocoa); Timor-Leste (coffee); and Viet Nam (coffee, cashew, and pepper). The assistance will also help OIL develop processing plants to create a more seamless integration of farmers, markets, and customers, adding more value in local markets and improving agricultural value chains.
The project includes $3 million in technical assistance (TA), partially financed by the Canadian Climate Fund for the Private Sector in Asia, to provide capacity building training to about 20,000 smallholder coffee farmers across the project countries. The TA includes training in avoiding deforestation and increasing productivity through climate-smart agriculture practices, including water harvesting and soil management.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members from the region.
Olam International is a leading agribusiness operating across the value chain in 66 countries, supplying various products across 18 platforms to more than 22,000 customers worldwide.
JICA, based in Tokyo, is the Japanese government agency to execute official development assistance and committed to take the lead in forging bonds across the world through contributing to sustainable socioeconomic development in developing countries.
(This is a reproduced ADB news as it is. Devdiscourse bears no responsibility towards grammatical or factual errors that may have been presented in the report.)