Illustrative photo (source: ADB)

The loans will help improve inclusive and sustainable agricultural value chains, directly benefiting up to 20,000 smallholder farmers in Indonesia, Papua New Guinea (PNG), Timor-Leste, and Vietnam.

ADB’s assistance includes a $83 million loan to OIL and a $5 million loan to COVL. The project is ADB’s first nonsovereign assistance directly cofinanced by JICA, which will lend $75 million to COVL.

Speaking at the signing ceremony, ADB Investment Specialist Juhyun Jeong said that developing formal value chains is essential for farmers in Asia and the Pacific to integrate with the global economy and increase the value of their products.

“ADB and JICA’s partnership with OIL and COVL will help smallholder farmers expand their production and operations, improving livelihoods by promoting inclusive and sustainable development, he said”

“Olam’s comprehensive and grassroots approach to improve agricultural value chains brings significant positive impacts to farmers and the agribusiness industry,” said JICA’s Investment Officer Gyo Shibata. “For the partnership with ADB’s private sector operations, we are excited to ink the first direct cofinancing deal and explore further collaborations.”

“This loan agreement underpins the mutual aims of Olam, ADB, and JICA to support the economic prosperity of farmers as well as help them become stewards of the environment—essential for the future of agricultural production,” said Prakash Jhanwer, Regional Head for South East Asia at Olam International.

The Agricultural Value Chain Development Project will support OIL’s $211 million investment plan until 2019 by financing an expansion in the firm’s processing of midstream products, while providing permanent working capital investments for smallholder farmers, particularly in Indonesia (coffee and cocoa); PNG (coffee and cocoa); Timor-Leste (coffee); and Viet Nam (coffee, cashew, and pepper). The assistance will also help OIL develop processing plants to create a more seamless integration of farmers, markets, and customers, adding more value in local markets and improving agricultural value chains.