Bacao S.A.S.
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Our customer is Bacao S.A.S., the main Colombian subsidiary of Andean Cacao GmbH whose vision is to catalyse change to the cacao sector by providing a scalable sustainable production model (productive, profitable, eco-friendly, and inclusive) that can satisfy the growing need for regenerative and carbon-neutral cacao. Bacao S.A.S. was created in 2016 and owns approximately 5,000 hectares. It will develop 3,720 hectares of cacao using best-in-class agriculture design and practices, of which approximately 1,752 hectares are already planted. The Company is backed by strong complementary shareholders (including a leading chocolate manufacturer) which uniquely positions the company for success through an advantageous long term off-take agreement and the sharing of industry-leading experience, know-how, and innovations in cacao farming, plant science and agronomy.
What is our funding objective?
FMO and IFC will jointly provide USD 42 mln in debt financing to the project. Funds will be used to: i) complete the investments in the approximately 3800 hectares of plantations and related infrastructure; and ii) cover the negative cashflow from operations during the scale-up of the project.
Why do we fund this investment?
This project aligns with FMO's ambitions to: i) support leading commodity off-takers to further integrate complex value chains like cacao; ii) satisfy the growing need for regenerative and carbon-neutral cacao; iii) support a project intended to demonstrate that cacao can be produced profitably and sustainably, spurring further commercial investment into primary production; and iv) support the wider cacao sector in Colombia by supporting clusters of smallholders with access to market and technical assistance. This project is labelled 100% Green.
What is the Environmental and Social categorization rationale?
This concerns an E&S B+ categorized investment, as the company engages in primary production of cocoa beans (own operations and a supply chain) which comes with potential adverse environmental or social impacts that are beyond the site boundaries and might in part be irreversible, although they can be prevented and addressed through relevant mitigation measures. E&S characteristics of this specific investment include assessment of the land acquisition process, history of the land and no deforestation, production practices and use of agrochemicals, labour and accommodation conditions, organizational Health and Safety, biodiversity, and pollution risk management. ESG performances will be focused on the assessment and management of these risks by incorporating Sustainable Agriculture Practices, Good International Industry Practices, including World Bank Group (WBG) Environmental, Health and Safety (EHS) General Guidelines. This will guide the company’s efforts to design and implement mitigants consistent with the unique characteristics of the country of production, the local population, and existing biodiversity. FMO’s environmental and social due diligence indicates that the investment will have impact which must be managed in a manner consistent with the following IFC Performance Standards in particular: PS 1 – Assessment and Management of Environmental and Social Risks and Impacts, PS 2 – Labor and Working Conditions PS 3 – Resource Efficiency and Pollution Prevention, PS 4 – Community Health, Safety and Security, and PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources. The following Performance Standards - PS 5 Land Acquisition and Involuntary Resettlement, 7 Indigenous Peoples and 8 Cultural Heritage - are not applicable to this project in this period, as the land has been acquired through willing buyer-willing seller transaction, and no impact on Indigenous Peoples, nor cultural heritages has been identified. FMO will periodically review the project’s compliance with the Performance Standards
More investments
Date | Total FMO financing |
---|---|
7/23/2024 | USD 11.00 MLN |
- Website customer/investment
- https://www.andeancacao.com/
- Region
- Latin America & The Caribbean
- Country
- Colombia
- Sector
- Agribusiness, Food & Water
- Publication date
- 3/21/2023
- Effective date
- 7/23/2024
- Total FMO financing
- USD 10.00 MLN
- Funding
- Building Prospects
-
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+