IFC’s €50mln Loan to Help Habesha Grow Local Barley Sourcing

ADDIS ABABA – IFC, a member of the World Bank Group, disclosed an investment of up to €50 million in Habesha Breweries S.C. to help the company expand operations in Ethiopia and increase local barley sourcing from smallholder farmers.

Announced on Monday, the loan is co-funded by the Dutch development bank (FMO) and Dutch banks Coöperatieve Rabobank U.A. and ING Bank N.V.

Ethiopia’s brewing industry is fast growing and an important contributor to economic growth, but the sector imports as much as 90 percent of its malt barley needs.

IFC and FMO would also help Habesha support farmers’ access to improved seed varieties and other agricultural inputs and provide best practices on agronomy and business management, according to the International Finance Corporation or IFC.

The project is expected to boost income for 15,000 smallholder barley farmers, double farm yields of participating barley producers and create 500 jobs.

“Programs that support local sourcing are critical to linking smallholder farmers to large supply chains, thus creating more economic opportunity and jobs for vital parts of the country’s agriculture sector,” said Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa.

IFC sees Ethiopia as a key market.

Over the past five years, IFC has provided 317 million US dollars in new investment commitments and mobilized 50 million US dollars across several sectors including agribusiness, small business development and manufacturing.

“Increasing farmer access to improved agricultural inputs such as seeds and fertilizers and building the agronomic and technical capacity of local, smallholder barley producers in Ethiopia will create more jobs and higher efficiency,” said Linda Broekhuizen, FMO’s Chief Investment Officer.

Habesha Breweries S.C. – established by a group of local Ethiopian investors in 2009 – is currently 60 percent owned by Netherlands-based Royal Swinkels Family Brewers, which invested in the Company in 2012.

“By being part of this financing, ING is pleased to support the farmer community in Ethiopia and at the same time reinforce the strategy of our appreciated client Royal Swinkels Family Brewers, which invested in Habesha Breweries in 2012,” said Kiran Sanchit, ING’s Head of Food & Agri EMEA.

Habesha said the new fund would be “key to growing” the malt barley supply chain in Ethiopia.
“We aim to increase smallholder farmers from 1,000 to 14,000 in the next five years and improve household incomes,” said Zewdu Negate, CEO, Habesha Breweries.

Image: With the support of IFC’s loan, the brewery plans to improve the lives of 14, 00 Barley farmers Photo File]

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