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Oikocredit Invests in Nicaragua’s Nicafrance

14 January 2016

(Press Release) Oikocredit closed 2015 with an important investment in Cafetalera Nicafrance, a Nicaraguan agroforestry company specialized in the production of high quality shade-grown coffee and timber for high-end applications. Oikocredit worked closely on this transaction with The Moringa Partnership, which led an investment in Nicafrance earlier in 2015.

The investment in Nicafrance will foster the development of a cluster of small and medium-sized coffee farmers (“Nicafrance Outgrowers”), providing financing and technical assistance as well as strengthening the forestry activities of the company.

Nicafrance, founded in 1992 by Mr. Clément Marie Ponçon, has successfully developed one of the largest coffee farms in Central America. The company already supplies large international roasters and leading coffee brands. Nicafrance is a unique example of an agroforestry system combining coffee plantations with sustainable management of ten native and precious tree species. The US$ 5.85 million investment by Oikocredit marks the beginning of a long-term partnership, which will see the development of a program to re-invigorate small and medium scale farms in the Matagalpa region of Nicaragua. The region has been severely affected by rust and the effects of global warming. The program will build a coffee cluster producing around 5,000 tonnes of specialty coffee per year for high-end roasters in Europe, the US and Asia.

The establishment of 1,700 hectares of agroforestry-based coffee on small and medium scale farms will improve the resilience of an area being affected by global warming. It is estimated that the project will store 127’000 tCO2. It will also provide higher incomes to growers and reduce poverty, while helping to create up to 6,000 permanent and seasonal jobs.

In partnership with the Nicaraguan government, Nicafrance Outgrowers is also participating in the 2.7 million hectare Nicaraguan reforestation program associated to the 20 x 20 Initiative supported by the World Resource Institute (WRI), whose objective is to restore 20 million hectares of forests in Latin America.”

Oikocredit has 40 years of experience financing agriculture, especially coffee, which Nicafrance can leverage to expand its regional and global network. Oikocredit manages a € 100 million portfolio in agriculture with nearly 200 partners in Latin America, Africa, Asia and Eastern Europe.

Tom Keleher, equity deputy director at Oikocredit said, “We are proud that Nicafrance has become part of our investment portfolio of well-respected companies pursuing creative and ambitious sustainable agricultural programs with multiple beneficiaries. This portfolio includes Sekem Holdings in Egypt, Ambootia Tea Estates in India and other partners world-wide. We look forward to working together with the other Nicafrance investors to support the company in further expanding its positive social and environmental impact.”

Antonio Rodriguez, Oikocredit’s investment officer responsible for Central America, said: “OIKOCREDIT´s value added, as a new shareholder, comes not only from contributing additional capital, but also by providing governance expertise, an expanded network and active involvement supporting Nicafrance’s initiatives and Management team. Oikocredit joins a reputable group of shareholders, whose vision goes beyond running a profitable company. The intention is to foster a sustainable impact in rural zones of Nicaragua through an innovative program that will support small and medium size coffee farmers. The out grower program has a triple bottom line impact, ultimately resulting in the development of sustainable, privately owned coffee farms, who follow international social and environmental standards.”