JICA unveils $75 mln loan to strengthen Asia’s coffee supply chain

The Japan International Cooperation Agency (JICA) has signed a loan agreement for up to $75 million with ECOM Agroindustrial Corp. Limited (ECOM), a global integrated supply chain merchant and processor of agricultural commodities, and its member company ECOM Agroindustrial Asia Pte Limited (EAA) to support the coffee industry in Asia.

Co-financed by the Asian Development Bank (ADB), this partnership marks a milestone in JICA’s first exclusive working capital loan. It represents a significant step in strengthening cooperation with key global agricultural trading companies to support Asia’s agricultural and food supply chain.

According to JICA’s press release, the loan is designed to strengthen supply chains and improve livelihoods and create employment opportunities for small-scale farmers in the Asia-Pacific region. This is being done by supporting the stable procurement of coffee from over 60,000 smallholder farmers in India, Indonesia, Papua New Guinea (PNG), and Vietnam.

The project supports purchase funds from small-scaled coffee farmers, and consulting services such as coffee certification support, climate change adaptation pilot projects and farming support to female farmers. These services enhance the climate resilience and strengthen gender equality of the region's coffee value chain.

In Vietnam, the world’s second-largest coffee producer, the project aligns with the Government’s agricultural restructuring program to enhance value-added production and ensure sustainable growth, as well as with the country’s 2021-2025 socio-economic development plan. Coffee exports currently account for 12.2% of the country’s total agricultural export value.

It also complements Japan’s global development agenda. Specifically, the Apulia G7 Leader’ Communiqué in June 2024 has set as a goal of G7 public-private initiatives to support the global coffee value chain and small-scale farmers in coffee-producing countries.

Yasui Takehiro, director general of JICA Private Sector Partnership and Finance Department, said that the project is a testament to the strong partnerships JICA has built with ECOM and ADB. It will strengthen the coffee supply chain and help address critical challenges such as poverty among rural farmers, gender inequality, climate vulnerability, and the need for sustainable economic opportunities in the region.

JICA remains committed to supporting inclusive and sustainable development initiatives in the Asia-Pacific region through strategic partnerships and providing innovative financing solutions.