The Common Fund for Commodities
Partner in Commodity Development
Common Fund for Commodities
Intergovernmental financial institution
Established within the framework of the United Nations
in 1989
Headquarters: Amsterdam, The Netherlands
102 member countries
Institutional Members: EU, African Union, Common Market for eastern and Southern
Asia(COMESA), South African Development Community (SADC), Economic
Community of West African States (ECOWAS), West African Economic and
Monetary Union (UEMOA), Caribbean Community (CARICOM), East African
Community (EAC), Eurasian Economic Community (EAEC), Andean Community
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Common Fund for Commodities
The Common Fund for Commodities (“CFC”) is an intergovernmental financial institution established within the
framework of the United Nations in 1989 and headquartered in Amsterdam
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Financing projects aimed at mitigating the vulnerability of commodity producers
by financing the development of innovative business models in the commodity
business
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The CFC supports interventions cover all aspects of the value chain from
production to consumption
Mandate
Core values
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Address vulnerability of poor participants of agricultural commodity value chains
Practical measures include diversification, value addition, market expansion, risk
management
Projects are structured around commodity value chains
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CFC Mandate
Enhance the socio-economic development of commodity producers, processors and traders
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CFC interventions aim at enhancing the
competitiveness and income opportunities
of commodity producers, processors and
traders in developing Countries by:
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Supporting a value chain approach (vertical integration,
diversification and reducing dependency on a single
commodity)
Improving the competitiveness and cost effectiveness of
commodity production: through the introduction of
modern technologies, sustainable inputs, higher quality
seeds and planting materials, waste reduction, IPM
strategies, etc.
Technology transfer - Stimulating the dissemination of
technology & know-how
Enhancing Food Security
Synergies among producers, industry, Government for
commodity-based economic development
Promoting and supporting Sustainable Development
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CFC Technical competence in commodity sector
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26 years of experience in financing projects in the commodity sector
Number of total Project financed: 390
Total cost almost USD 800 million, of which USD 400 million is CFC funding
5 Projects financed in the tea industry, for a total of USD 8.5 million of grants
Currently a USD 4.2 mln investment is under appraisal for a CFC loan up to USD 1.5
millions to finance an investment aimed at the modernization of tea infrastructure
in Sri Lanka
• Some projects are supported by:
Dutch Trust Fund
EC
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The CFC Network
Agricultural
Development
Research
Institutions
(CGIAR) / NARS
National
Governments
International
Commodity
Bodies (ICBs)
Charity
Foundations
/Non-profit
organisations
Consultants /
Technical experts
Producer
organisations /
NGO’s
Impact Investing
Funds
UN System
CFC
Private Sector
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Evaluation methodology
Beneficiaries
Direct Beneficiaries
Indirect Beneficiaries
Economic
Production
impact on
Others
(Net) Project Benefits
Hectares under
production
Food Security
Value Added
Modernization/ access
to markets
Sustainability
Farmers’ Income
increase
Yield increase
Modernization and
environmental impact
Quality improvements
benefit
Women inclusion
Firms/Cooperatives
assisted
Minority inclusion
Production Costs
Jobs Created
Additional Revenues
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CFC – Activities until the end 2012
• Up until the end of 2012 CFC interventions was mainly in the form of grants to finance projects of general
interest for all the commodity stakeholders (Research Institutes, International Commodity Bodies, producers
organizations, NGOs, national governments, and the private sector)
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CFC – Activities until the end 2012
Breakdown by geography
Starting from 2013 the
% of grants is decreasing
in favor of other
financing instruments
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CFC – Activities until the end 2012
Intervention in the value chain
Financing structure
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CFC - New Financing Policy
• Starting from 2013 CFC’s mandate has been extended to finance projects promoted by Small and
Medium Sized Enterprises operating in the private sector. Grant financing are limited to small
scale interventions up to USD 120,000.
• This change represents a great opportunity for private sector players in the commodity business
to propose innovative projects for CFC financing.
• Private sector stakeholders may benefit from pilot projects and previously financed researches.
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CFC - New Financing Policy
• Flexible Financing Instruments depending on project characteristics and final beneficiary profile and
financial need.
• Main Instruments of financial support to commodity stakeholders:
Loans
on concessional terms
Financial
intermediaries
Participation in
investment funds
Direct equity
investments
Grants
Associations and
NGO’s
Corporates
ICBs, Research
Institutes,
Development
agencies
Corporates
Associations and
NGO’s
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Micro, Small and Medium sized projects
Amount of CFC financing ranging from USD
100,000 to USD 1.5 million
CFC financing is up to 50% of the project costs
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CFC - New Financing Policy
Projects :
• Shall be Innovative
• Shall promote inclusive growth and engagements with indigenous people
• Shall be financially sustainable
• Shall be environmentally sustainable
• Shall have a reliable management and implementation strategy
• Shall have final beneficiary focus
• Shall be scalable and replicable
• Should have and economic and social development impact on vulnerable stakeholders
(direct/indirect beneficiaries)
The CFC does not finance start-ups
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CFC - New Financing Policy - Grants
• The Fast Track Projects limited to small scale interventions.
• Between USD 50,000 and USD 120,000
• Some example:
• Bamboo as housing material in Nepal – via INBAR
• Sisal value chain enhancement in Haiti – via Concern World Wide
• Coffee and Cocoa production by a minority group in Peru – via
Rainforrest Foundation UK
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CFC - New Financing Policy - Loans
Term loans
• Loan Amount: Between USD 300,000 and USD
1,500,000;
• Eligibility criteria: innovative projects,
commercially viable with an economic
development or social impact. The CFC finances
up to 50% of project costs
• Tenor: up to 7 years;
• Interest rate: depending on CFC risk assessment
• Repayment: amortized with the possibility of
obtaining a grace period on repayments
Commodity Orientation Interventions
Development Relevance/Impact
Environment Effects/Impact
Addressing Receptive Market
Financial Viability
Quality of Loan Proposal
Own Contribution
USD 300,000 – USD 1.5 mln
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CFC provides expertise as Partner in Impact Investment Funds
The CFC provides
technical assistance to
AATIF and the companies
in its portfolio.
TA includes:
• Training for credit
officer on agribusiness
lending
• Project structuring
• Contract farming
outgrow schemes
• Value chain analysis
The CFC is currently expanding this business line
CFC invests in Impact Investment Funds
Starting from 2012, the CFC started participating in impact investment funds related to agricultural commodities,
recognizing the impact of these funds carry on communities and value chains.
AAF SME Fund
Sustainable Investment Fund Tanzania
Application and Appraisal Process
CFC seeks applications for financing from all interested parties through open call for proposals targeting specific
commodity issues. The call for proposals are published on international press (The Economist)
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Project Proposals obtained through 2 Open Calls per year (April and October)
Lead Time – from selection to Financing about 8 months (April to December)
Open Call for Proposals and development of the Project Profile
ICB review (Optional)
CFC Secretariat assessment and screening
CFC Consultative Committee – Technical review
CFC Executive Board – Final approval
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Application Process - Information & Documentation needed
• Completed application form and a business plan
• On the CFC web site is possible to download the application form
• Application needs to clearly state expected impact such as:
• Beneficiaries and Incomes
• Impact on the environment
• Additional development impact indicators, as applicable for the proposed
activity such as:
• Impact on value chain
• Impact on the market system
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Financed Projects in the Tea industry
Development production and trade of organic tea – China and India – FIGT 04 – in cooperation with FAO, IFOAM and
Indian Tea Board
Developed, on a pilot basis, the technology
and techniques for organic tea production
Set up of modern farms in China and India
Model farms established in:
 Zhejiang province; Fujian Province,
Guangdon province in China
 Assam, Darjeeling, Anamalai in India
Developed appropriate export strategies and
market development
Total project costs: USD
7 mln of which USD 3.5
mln financed by the CFC
in the form of a grant
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Financed projects in the Tea industry
Capacity building and rejuvenation of tea smallholders farmers in Indonesia and Bangladesh –– FIGT 05 – in cooperation
with FAO and Indonesia Tea Board and Bangladesh Tea Board
Total project costs:
Objective:
The project aimed at:
• strengthening the knowledge
base of tea small holder
farmers
• rejuvenate smallholder
farmers production technique
in Indonesia and Bangladesh
for enhanced productivity and
quality improvement
USD 2 mln of which
USD 1.8 mln financed
by the CFC in the form
of a grant (including
USD 0.9 mln from the
OPEC Fund for
International
Development - OFID)
Tea Board of Indonesia acted as
Project Executing Agency and
manager for the project activities
in both countries.
The Bangladesh Tea Board acted
as Project Implementing Agency
in Bangladesh
The project is
completed in both
countries
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Financed projects in the Tea industry
Capacity building and rejuvenation of tea smallholders farmers in Indonesia and Bangladesh –– FIGT 05 – in cooperation
with FAO and Indonesia and Bangladesh Tea Board
Indonesia
Jan 2011 to June 2015
Budget USD 1.1 mln
Results:
• Increased performance of existing tea
smallholdings
• Training of smallholder tea farmers on
production and harvesting techniques
• creation of cooperatives for strengthening
relation with processors
• Self help group system implemented
The project benefitted around 1,000 households
for a total area of 790 ha
3 locations in the outlined
areas: Bandung, Cianjur and
Majalengka
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Financed projects in the Tea industry
Capacity building and rejuvenation of tea smallholders farmers in Indonesia and Bangladesh –– FIGT 05 – in cooperation
with FAO and Indonesia and Bangladesh Tea Board
Panchagarh
Bangladesh
Limited progress during the
project life (3 years including a
one year extension)
Two tea nurseries have been
established in Panchagarh and
one in Bandarban
Training has not been completed
Bandarban
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Projects in the Tea industry under appraisal
Tea Supply chain in Sri Lanka – investment in a state of the art warehouse in Colombo
Objective:
The project aims at:
• Building a state of the
art warehouse in
Colombo
Open Call for
Potential borrower:
One of the largest tea
broker in Sri Lanka
Total
project
costs:
USD 4.2
mln of
which
Proposals
USD 1.5
financed
by the
CFC
and
Development impact:
• reducing delivery time at the
Colombo Auction from 1.5 days
to 1.5 hours
• reducing the tea to cash cycle to
3 weeks.
• Enhancement of hygienic and
safety of warehousing services
•
additional
jobs created
development of36the
Project
Profile
• additional 30,000 tea growers
will benefit from racking storage
which is far superior to storing on
the floor.
• assuming ownership of two acres
per grower, 3% income increase.
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Upcoming Call for Proposals
• The next Call for proposals will be opened on March 2016
• Deadline for submission of applications: the deadline will be around
April 2016
• Screening of proposals: May 2016
Contacts
Website:
Phone Number:
E-mail General Questions:
E-mail Open Call for Proposals:
Visiting Address:
www.common-fund.org
+31 (0)20 575 4949
managing.director@common-fund.org
clt@common-fund.org
Stadhouderskade 55
1072 AB Amsterdam
The Netherlands
Thank You