Project detail - Volcafe Limited

Who is our prospective customer?

Founded in 1851, Volcafe Coffee Group has over 170 years of history. It is one of the largest global coffee traders in the world with subsidiaries in all main coffee origin countries in the world. Volcafe Coffee Group forms part of the larger trading group ED&F Man Commodities.

What is our funding objective?

The funding objective of this transaction is to support Volcafe's coffee procurement in Costa Rica. Volcafe Costa Rica is a leading exporter of high quality and sustainable coffee and has established itself as a trustworthy coffee partner for farmers and suppliers. In Costa Rica, Volcafe sources mostly from smallholder farmers (over 85% of the farmers are smallholder farmers) and more than 70% of the coffee procured is certified by Rainforest Alliance.

Why do we want to fund this investment?

This project aligns well with FMO's ambitions to: i) support leading coffee traders to build sustainable and inclusive value chains, through access to financing for origination but also further up the chain with smallholder farmer financing; ii) contribute to the viability of the coffee sector in countries like Costa Rica, which have seen urbanization and development encroach upon coffee-growing regions, while having the potential to increase production of high-quality coffee.

What is the Environmental and Social categorization rationale?

This is a Category B+ project according to IFC’s Policy on E&S Sustainability because it may cause significant adverse E&S risks and impacts that may be diverse, but which can be mitigated with adequate management plans. The main risks associated with this project are (i) wastewater discharge pollution; (ii) occupational health and safety risks; (iii) poor work conditions among coffee harvesters and child labour along the supply chain; (iv) potential impacts on natural habitat and biodiversity along the supply chain (including deforestation and pollution used by excessive use of agrochemicals). While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS 1 - Assessment and Management of Environmental and Social Risks and Impacts PS 2 - Labor and Working Conditions PS 3 - Resource Efficiency and Pollution Prevention PS 4 - Community Health, Safety and Security PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources PS 5, 7 and 8 are not triggered since i. there is no land acquisition or economic displacement as a result of this transaction; ii. it is not expected any negative impact on indigenous people's land and the areas where the coffee is sourced are not close to indigenous territories; and iii. it is not expected to affect material or immaterial cultural values.