Investing in Sierra Leone’s Private Sector during the COVID-19 Crisis
Sierra Leone, March, 24 2021 -
Cordaid Investment Management and Triodos-Hivos Fund team up to invest $1 million debt in Capitol Foods Limited in Sierra Leone. The investment supports business growth and the lives of thousands of farmers in the midst of the Covid-19 pandemic.
Cordaid Investment Management (CIM) and Triodos-Hivos Fund, two Netherlands-based impact investment funds, co-financed Capitol Foods’ expansion of its local fruit processing capacity to meet the growing demand for its Sierra Juice beverage products. The debt facility will also enable the company to provide greater market access for thousands of fruit farmers in Sierra Leone.
Immediate relief to thousands of farmers
For Capitol Foods, the timing of the loan was extremely valuable. Not only did it facilitate the purchase and installation of their 3-tonnes-per-hour fruit processing plant, but it did that during the peak of the Covid-19 outbreak. Hamza Hashim, CEO of Capitol Foods: “This loan created an immediate relief to both our company’s input supply chain and to thousands of rural farmers around Sierra Leone. Farmers whose access to the market was limited due to movement restrictions.”
“The loan will also support our working capital needs as global supply chains and logistics take a hit due to Covid-19 effect”, says Hamza Hashim, CEO of Capitol Foods.
“CIM and Triodos combined knowledge and competencies to structure this deal that will meet the needs and growth plan of Capitol Foods. Leveraging on CIM’s presence in Sierra Leone, we carried on with the due diligence of the investment during the pandemic. This prevented further delays of the expansion project,” says Lorisa Canillas, Senior Investment Manager at CIM.
Bringing about systemic change
The loan will help Capitol Foods source more than 5,000 tons of fruit annually, impacting around 10,000 farmers. “The loan will also support our working capital needs as global supply chains and logistics take a hit due to Covid-19 effect,” says Hashim. As Sierra Leone is considered a high-risk market, many financial institutions shy away from investing here, which impedes the further development of many sectors, especially agriculture and agri-processing. “We aspire with this collaboration to change the rhetoric around the market, and bring about the systematic change that goes beyond our firm,” he continues.
Hamza Hashim and Capitol Group have been instrumental in making the cacao sector in Sierra Leone more sustainable in the past decade. Building on their close cooperation and connection with small-scale farmers they have expanded their business activities with the production, processing, and marketing of fruit juice. This means a steady market for thousands of farmers, more employment and showcases how locally produced and high-quality fruit instill a feeling of pride and support the local economy. “We are proud to have been part of Capitol’s journey since 2016 when we provided a first trade finance facility with Hivos-Triodos Fund. And this journey continues with a debt facility, in partnership with Cordaid,” says Joke van der Ven, Senior Investment Manager at Triodos Investment Management.