Agroforestry private equity impact fund Moringa has made its first investment, into a Nicaraguan company producing coffee beans and high-end timber.
The capital will be used to strengthen Cafetalera Nicafrance’s forestry activities and finance the development of a cluster of small and medium-sized coffee farmers.
Cafetalera Nicafrance combines coffee plantations with the production of 10 native and precious tree species producing shade-grown coffee and timber for high-end applications.
Moringa’s investment will help the company to produce around 5,000 tonnes of speciality coffee per year for premium roasters in Europe, the US and Asia. Nicafrance already supplies large international roasters and leading coffee brands. It will also help “re-invigorate small- and medium-scale farms in the Matagalpa region of Nicaragua that have been severely affected by the rust [disease] and the effects of global warming”, reads the press release.
Moringa is also bringing external expertise to the programme – its technical partner is the international subsidiary of the French Office National des Forêts (ONFI), which has forestry management experience. Global coffee trader ECOM will also contribute its network and experience with coffee growers.
“Nicafrance is a perfect example of a financial investment which combines robust financial performance requirements, with a positive and direct environmental impact while also reducing poverty,” said Moringa partner Hervé Bourguignon in a statement. “The financing structure for the agro-forestry farms is innovative, and highly replicable throughout Central America.”
Moringa is set to close on or close to its €100 million target during the first quarter of the year. It is currently on €70 million after getting a €10 million commitment from African Development Bank in October.