ADDIS ABABA, ETHIOPIA — IFC is investing 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.
The loan is co-funded by the Dutch development bank (FMO) and Dutch banks Coöperatieve Rabobank U.A. (Rabobank) and ING Bank N.V. (ING Bank).
“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’s regional director for Eastern Africa.
According to IFC, Ethiopia’s brewing industry is fast growing and an important contributor to economic growth, but the sector imports as much as 90% of its malt barley needs.
“Our partnership with IFC and other lenders is timely and key to growing the malt barley supply chain in Ethiopia,” said Zewdu Negate, chief executive officer of Habesha Breweries. “We aim to increase smallholder farmers from 1,000 to 14,000 in the next five years and improve household incomes. This investment has a purpose and feels like the right thing. I am extremely proud that we are able to continue to build and grow the brewery in partnership with the barley farmers and residents.”
In addition to the financing, IFC and FMO will help Habesha support farmers’ access to improved seed varieties and other agricultural inputs and provide best practices on agronomy and business management.
“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, chief investment officer of FMO.
The project is expected to boost income for 15,000 smallholder barley farmers, double farm yields of participating barley producers and create 500 jobs.
“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. “Thanks to our Food & Agri expertise and our longstanding history with many of the largest beverage players in the world, we feel confident to participate in this facility.”