Ethiopian Coffee

completed

The proposed Project in Ethiopia is part of the East Africa Coffee Initiative (CI) covering four countries (Ethiopia, Kenya, Rwanda and Tanzania) to improve the productivity and sustainable livelihood of coffee farmers in the targeted countries. The TechnoServe’s (TNS) CI was awarded a US$47 million grant by the Bill & Melinda Gates Foundation. Under the initiative, TNS will (i) work with coffee farmer cooperatives to improve their business management skills; (ii) provide them with training to improve quality of the coffee produced; (iii) facilitate farmer’s access to credit by developing a business plan for each washing station (“wet mill”) and present to the partner banks; (iv) facilitate their access to markets by linking them to key buyers; and, (v) provide farmers with agronomy and extension services to improve their yields. Overall, the initiative in the four countries expects to reach 180,000 farmers within a four-year period. This specific Project encompasses the establishment of a 3-year, up to US$10 million revolving IFC guarantee facility for selected national bank participants under a financing program to assist coffee farmer cooperatives in Ethiopia to (i) acquire wet mills for processing “cherry” coffee; and (ii) meet their working capital needs. The total size of the financing program over the 3-year period is expected to be US$21 million. Up to 20% of the program will be for equipment loans of a 3-year maturity while the remaining 80% will be harvest working capital loans of up to one year. Coffee production targeted by this project is grown under canopy cover (“shade coffee system”) of diverse native trees species which help maintain ecological functions (e.g. soil conservation, water cycle maintenance, carbon sequestration). The targeted region is situated in semi-forest areas in South-western Ethiopia. Most specialty coffee production in Ethiopia only uses organic fertilization and, as such, does not rely on inorganic fertilizers and/or pesticides. In terms of process, the selective picking (only the ripe coffee cherries are harvested) is done by hand, a labor-intensive process. This kind of harvest is used primarily to harvest the finer Arabica beans. Cherry is then transported from the fields to the collection points and subsequently to the wet mills. Under this project, the processing promoted used a newer procedure variously called machine-assisted wet processing or mechanical demucilaging. Processing capacity of the wet mills is 1.0 or 2.4 tons/hour. After overnight fermentation, the resulting coffee beans (“parchment”) are dried in the sun on large raised drying tables for a period of 7-10 days in order to achieve the desired moisture content of 11%. The parchments are then transported to service providers/exporters in Addis Ababa to undergo the dry milling, which encompass hulling to remove the parchment and silver skin. The green beans are then transported by truck to Djibouti for export in bags of 60kg.