Project detail - Neumann Gruppe GmbH

Who is our customer

German based Neumann Kaffee Gruppe (NKG) is a leading green coffee merchandiser with operations spread over 26 countries. The group is active across the entire coffee value chain, from owning and operating coffee farms to exportation of green coffee from origins and importation of green coffee into consuming regions. NKG also has service divisions which offer market research, coffee-related training and education, warehousing, milling, blending and logistics solutions.

What is our funding objective?

FMO participates in NKG’s Smallholder Livelihood Facility (SLF) which is a part of NKG’s Responsible Business Program (NKG Bloom) to source sustainably produced coffee and support the livelihoods of smallholder farmers. The SLF was established in 2019 by NKG backed by IDH, BNP Paribas, Rabobank and DFC for financing individual smallholder farmers and cooperatives.

Why do we fund this investment?

Through its sustainability program NKG Bloom, NKG aims to reach 300,000 smallholder farmers by 2030 (currently +81,000) via its impact-backed initiative SLF. In doing so, NKG fills the financing gap that smallholder farmers face (short term to long term financing opportunities), offers technical support and other production-related services. In the end, the initiative and the partnership brings access to financial services for smallholder coffee farmers. By participating in SLF, FMO helps NKG to further accelerate its Sustainability model and align it with the IFC Performance Standards.

What is the Environmental and Social categorization rationale?

The E&S category is B+, due to largely reversible impacts, which can be mitigated through good management practices and Good International Industry Practice. The Company's fixed assets are mainly coffee mills, buying stations, warehouses and washing stations. Current assets as well as the supply chain show exposure to IFC Performance Standard (PS) 1 to 4 (I.e. ESMS, occupational and community health and safety, promote more sustainable use of resources, including energy and water), as well as 5 and 6 (land acquisition legacy issue and possibly biodiversity loss / deforestation through enlargement small holder plots using SLF). Note that all investments will be managed in accordance with the IFC PSs, and an Environmental & Social Action Plan will be part of the agreement.