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Investment Name: B-BOVID Ltd
Publication date: 16 Dec 2020
Sector: Palm oil
Total AgriFI Financing: Equivalent in EUR of 1.9 m USD (~1.6 m €)
Environmental and Social Category: B+
(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk
B-BOVID Ltd is a Ghanaian UN Award-winning farming and processing palm oil enterprise created in 2014 and based on social entrepreneurship principles and agroforestry practices. The company produces crude and kernel palm oil with most of its palm oil fruits supply coming from more than 2,400 smallholder farmers. It owns a demonstration plantation, showcasing agroforestry practice, and has already performed training of several thousands of farmers and students to climate-smart agriculture. B-BOVID Ltd’s unique model in West Africa promotes farmers’ revenues increase and diversification, social inclusion and low environmental impacts.
International and local palm oil demand is rising, but Ghanaian smallholders lack adequate agronomic, logistics and financial support as well as a reliable industrial market for selling and efficiently processing their fruits. B-BOVID Ltd aims at answering the need to accelerate the development of productive oil palm sector focused on smallholders intensified and sustainable production. In that respect, B-BOVID’s business model has the ambition to become a figurehead for sustainable palm oil production.
The Moringa Fund, an investment fund targeting agroforestry projects located in Latin America and Sub-Saharan Africa, has invested more than 5mn USD since 2018 to enhance and strengthen the company’s unique out-growers based model, namely modernising B-BOVID Ltd’s manufacturing plant and expanding its production capacity to further meet growing local and regional fat demand while offering farmers a secured market for their palm oil fruits all-year long.
Funding objective and impact:
AgriFI funding aims to support the company’s activities scale up, financing a co-generation unit required for the palm oil mill to run at full capacity: producing electricity out of production waste, which will enable BBOVID Ltd to avoid blackouts and save electricity costs while reducing C02 emissions. This will enable to increase the mill capacity, supporting BBOVID Ltd’s objective to source from 4,000 farmers in the next 4 years.
Why AgriFI wants to fund this project:
- The investment fits AgriFI mandate because: the company is smallholder focussed with its agroforestry services and provides a reliable outlet for palm oil fruit production in a complex sector,
- the investment enables to increase the company’s processing capacity and hence sustainably source more from smallholders,
- on the ecological side, the co-generation unit will valorise production waste & decrease the company CO2 emissions.
Environmental and social rationale:
The E&S risk category is B+.
The main E&S impacts and risks relate mainly to labour conditions, regulatory compliance and wastewater pollution. The transaction will be managed in accordance with IFC Performance Standard 1,2,3, 4, and 6. Performance Standard 5,7 and 8 are not triggered. The current ESMS is being upgraded, while the EHS staffing and training capacity strengthened.