Pre- & post-investment Technical Assistance by LDN TAF
Direct access to off takers and access to capital through large agroforestry projects reduce commercial and financial challenges of cooperatives and their members. However, addressing the ‘governance challenge’-and thereby the quality of the relationship between the cooperative and its members- is often underestimated by all stakeholders and considered a high investment risk. Governance is here understood as both the way of governing/managing (human factor) and the systems associated (processes). Strengthening governance brings sustainability to investments but requires tailor-made coaching over the long term, which is not financed to date.
To address this challenge, Kinomé aims to establish a “Governance Assistance Facility” to provide long-term capacity building support to small farmers and cooperatives in the construction of a solid and perennial social base with healthier governance practices. Which would allow in the long run to:
- De-risk existing investments by building stronger and more resilient cooperatives;
- Open new investment opportunities with organizations that were too high- risk.
Kinomé will be supported by Ecotierra (LDN Fund Investee, manager of the Urapi Sustainable Land Use Fund and project partner). Kinomé will start engagement with local cooperatives supported by the Urapi fund in Colombia and Peru as case studies. In the long term, GAF aims to operate independently and scale the model in LATAM and West-Africa.
The feasibility and design study will include a funding plan to attain funding from both private and public sector sources.
Note: The LDN Fund is not considering investment directly into the GAF.
The LDN Fund already invested in the Urapi Sustainable Land Use Fund, managed by Ecotierra out of Canada. Since then, Urapi made 2 investments: the Café Selva Norte project in Peru, and the Riosierra project in Colombia. The goal is to partner with cooperatives and to finance the transition of its members to sustainable land use through cocoa and coffee agroforestry. Both projects receive post-investment TA support from the LDN TAF.
This project will enable Urapi to reduce the risk of the projects in their existing portfolio and prepare more projects for investment.
The LDN TAF supports Kinomé with a feasibility and design study to analyze the main governance challenges experienced by agricultural cooperatives and define stakeholders needs including a gender focus, to refine the GAF’s value proposition, to design a business plan and assess private/blended finance funding opportunities to replicate and scale the model.
Technical assistance support from the LDN TAF does not constitute a commitment from the LDN Fund, or Mirova, to finance directly or indirectly the project described above. Any such commitment shall be subject to inter alia, a detailed technical, financial and legal due diligence of the company and the project, as well as all required LDN Fund investment committee approvals and satisfactory documentation.