Project detail - Cooperativa Regional de Cafeicultores em Guaxupé Ltda-Cooxupé

Who is our prospective customer?

Cooperativa Regional de Cafeicultores em Guaxupe (“Cooxupe”) is a coffee cooperative in Brazil with more than 19,000 members. The Cooperative receives coffee produced in more than 300 municipalities in its area of action, located in the South of Minas, Cerrado Mineiro, Matas de Minas and Vale do Rio Pardo (in the state of São Paulo). Cooxupe’s mission is to promote the sustainable development of its members by receiving, storing, processing, and commercializing the production of its members. Additionally, it provides technical assistance and financial support.

What is our funding objective?

FMO plans to provide a USD 30mln bilateral pre-export finance facility with a 5 year tenor. Cooxupe will procure, warehouse, and commercialize Rainforest Alliance-certified coffee from its members. In Brazil, In 2023, Cooxupe sourced 31% of its coffee from family farming and 28% from small producers. Around 22% of the total coffee bought by Cooxupé was certified by the Rainforest Alliance.

Why do we want to fund this investment?

FMO intends to support the sustainable growth of coffee farmers and a leading cooperative in Brazil. Thanks to Cooxupe's aggregation capacity, farmers can sell coffee at scale instead of in small quantities to middlemen. Furthermore, with the financing facility, FMO supports inclusive business growth by enabling Brazilian farmers to continue and expand their efforts towards climate resilience plans with certified coffee. The investment has a 100% Green label and potentially 100% Reducing Inequalities label.

What is the Environmental and Social categorization rationale?

This concerns an E&S B+ categorized investment as the cooperative's activities come with potentially adverse environmental or social impacts that extend site boundaries and might in part be irreversible, although they can be prevented and addressed through relevant mitigation measures: the cooperative processes and trades green coffee and relies on the primary production of coffee from the cooperative members (i.e. coffee farmers). Current assets and the cooperative's direct coffee processing and trading operations show exposure to IFC Performance Standards (PS): PS1: Assessment and Management of Environmental and Social Risks and Impacts, PS2: Labor and Working Conditions, PS3: Resource Efficiency and Pollution Prevention and PS4: Community Health, Safety, and Security. The cooperative's supply chain (i.e., cooperative farmer members) shows exposure to PS2 (Labor and Working Conditions) and PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) for risks associated to coffee farming. Note that all investments will be managed in accordance with the IFC PSs, and an Environmental & Social Action Plan will be part of the agreement.