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Investment Name: Kentaste
Publication date: 05 February 2021
Sector: Coconuts Products
Total AgriFI Financing: USD 1.5 million (around EUR 1.2 million)
Environmental and Social Category: B
(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk
Kentaste is a fair trade and organic certified manufacturer and distributor of coconuts-based products, namely coconut milk, coconut cream, virgin coconut oil and desiccated coconut. The firm is based along Kenya’s coast and works with about 2,700 smallholder farmer suppliers in Kwale and Kilifi counties of which nearly 1,800 are registered organic and fair trade. The products are transformed at Kentaste facility in Ukunda and are then distributed across East Africa through large, mid-size and small supermarkets mainly under Kentaste retail brand. A growing part of the production is also exported in bulk.
Which EDFI AgriFI is willing to enable Kentaste to become one of the leading coconuts-based products manufacturer based in Sub-Saharan Africa by funding the upgrade of production facilities with working capital.
Funding objective and impact:
EDFI AgriFI want to accompany Kentaste growth by supporting the company via:
– investments that should allow the company to improve its production capabilities and performances (from 30,000 coconuts per day to 60,000) primarily via processing facility, equipment and machineries for the production of virgin coconut oil, desiccated coconut, coconut milk and cream;
– supporting long-term working capital needs that should contribute to source more products from smallholder farmers and support the ramp-up of Kentaste.
By supporting Kentaste, EDFI AgriFI expects to reach between 4,000 and 5,000 smallholders by 2024 in rural Kenya.
Why AgriFI wants to fund this project:
– Local economic growth and creation of added value in the host country: Kentaste sources and transforms its products locally in Kenya, thus contributing to the creation of added value in the country;
– Creation of income opportunities and rural development: By sourcing crops from smallholder farmers, Kentaste creates opportunities for smallholders, enhancing their revenues and livelihoods;
– Farmers empowerment and entrepreneurship: The project contributes to farmers empowerment since Kentaste provides seedlings to farmers, trains them on organic growing methods and Good Agricultural Practice, ensures access to market and fair price while doing capacity building with local organisations.
– Environmental impact: Kentaste is certified organic and encourages farmers to use an agroforestry model, contributing to reforestation and climate change adaption/mitigation.
Environmental and social rationale:
Based on Environmental and Social (E&S) risks/impacts the E&S risk category is B. Material E&S risks and impacts include the following: those associated with the production and commercialization of plant based consumer goods notably the use of energy and water, the efficient use of raw material inputs, the management of waste and their recycling or proper disposal, and the appropriate management of the company’s human resources and compliance with the labour laws of the country of operation.
E&S risks will be mitigated by the implementation of the existing Environmental and Social Management System and Environmental and Social Action Plan. The relevant IFC Performance Standards are PS1 to 4 (Management, Labour, Resource Efficiency, Community Health Safety and Security).