Project detail - NICHE CONFECTIONERY LIMITED

NICHE CONFECTIONERY LIMITED

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Who is our client

Niche Cocoa Industry Ltd. is the largest independent cocoa processor in Ghana with a capacity of 90,000 tons per year and the owner of Niche Confectionery Ltd., a Ghanaian producer of cocoa confectionery products. The group was founded in 2011 and is 100% Ghanaian owned. Niche Confectionery produces finished chocolate goods such as bars, spreads, and drinks for the local market as well as for export.

Funding objective

FMO's funding will go to both Niche Cocoa Industry Ltd. and Niche Confectionery Ltd. The EUR 26.5mln facility consists of an EUR 18.5mln committed tranche that will be used to (i) purchase solar panels, (ii) acquire chocolate manufacturing equipment and (iii) pre-finance cocoa cooperatives under Niche’s sustainable cocoa sourcing program as well as an EUR 8mln uncommitted tranche for permanent working capital.

Why we fund this project

Cocoa is Ghana’s most important agricultural product. However, traditionally a high percentage of cocoa beans is exported with low to no value added locally. Supported by this investment, Niche will expand its range of activities to cover the entire value chain – from bean-to-bar – within Ghana. This will lead to further employment, technical know-how and value addition within the cocoa sector, all of which contribute to the country’s socio-economic development. Furthermore, we will support the company in developing its own sustainable cocoa sourcing program. Finally, the solar panels will provide Niche with a green power source and substantially reduce its electricity needs from the grid.

Environmental and social rationale

E&S category is B+ (high medium). IFC Performance Standards (PS) 1-4 and 6 are triggered. PS 5 (land acquisition) is not applicable for the factory as the project is located at an existing Niche site. For the supply chain, E&S due diligence did not identify any land grabbing associated with cocoa production. PS 7 (indigenous people) and PS 8 (cultural heritage) are not applicable, as no indigenous people are impacted by the project and no cultural sites are located in the vicinity. Niche runs a comprehensive Environmental and Social Management System at the factory. Core E&S risks are associated with the cocoa bean production at the farm level, which Niche mitigates through direct engagement with farmer cooperatives via the sustainable cocoa sourcing program. This includes cocoa bean traceability, sponsorship of community service projects and paying premium prices to sustainable cocoa smallholders. The investment will enable Niche to expand its engagement with cocoa farmers to eliminate environmental and social risks at the farm level and to introduce renewable energy use at the factory.

More investments

Date Total FMO financing
9/16/2019 EUR 8.00 MLN
Region
Africa
Country
Ghana
Sector
Agribusiness, Food & Water
Signing date
11/30/2020
Total FMO financing
EUR 8.00 MLN
Fund
FMO
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B+