Finnfund invests in Tanzanian avocado producer
Finnfund, a Finnish development finance company, has provided a €2.5m secured loan to Africado, a Tanzanian avocado producer.
“We want to support the growth of Africado as well as strengthen the development of the whole area. It is important to promote responsible farming methods of avocados and other crops. With the help of Africado, the smallholders also get an important sales channel and opportunity to export their products,” said Jari Matero, Senior Investment Manager, Head of Agri and Forestry portfolio at Finnfund.
Africado was established in 2007 as Tanzania’s first commercial and international grade producer of avocados.
The company farms 137 hectares around the Kilimanjaro area and contracts other commercial and local small holder farmers.
Africa is specialized in Hass variety, which are exported primarily to the EU.
Avocados have been widely grown for domestic household consumption in gardens and small farms within Kilimanjaro for more than 100 years.
The humid tropical climate in the area provide ideal growing conditions where avocados flourish naturally but a lack of markets and knowledge of commercial varieties has meant that avocado production has provided no economic value.
Commercial production only started in 2007, when Africado introduced Hass to Kilimanjaro at its own orchards after which the company has worked closely with local smallholders, distributing avocado seedlings, training about good agricultural practices and providing market access.
The outgrower program currently encompasses around 2000 local farmers, creating employment and income to thousands of people in the area.
The company has received an international GlobalGAP certification for safe and sustainable agricultural practices.
With new development operations it is expected that the number of jobs may double and provide employment particularly for women.
Africado promotes responsible agricultural and employment practices, and generate export income, strengthening the balance of current payments of the country.
With the help of the new financing, Africado has started to expand and develop its operations.
“Finnfund’s funding of Africado has enabled Africado to pursue new investment opportunities. In expanding production areas and with the introduction of new avocado cultivars Africado will have a sustainable business to the economic benefit of the local community in terms of employment and development and nationally e.g. in terms of increasing export earnings,” said James Parsons, CEO of Africado. Source: Africa Global Funds