Procafecol was founded in 2002 by Fedecafe, the National Federation of Coffee Growers of Colombia (Fedecafe or the sponsor). Fedecafe is a private not for profit organization established to support the development of Colombia’s coffee sector.

Fedecafe owns about 83 % of the company with individual coffee growers accounting for the rest.

The company is inviting IFC to invest up to $20 million in equity and plans to raise additional funds from Fedecafe and other sources to finance its ongoing expansion plan.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

* These investment figures are indicative

The company plans to open up to 150 cafés and kiosks in Colombia and in selected international markets.

The company’s proposed expansion will contribute to generate significant direct employment through hires and indirect employment through sourcing of food and other supplies in local communities. The growth and success of the company will, in turn, support the continued development and strengthening of the Colombian homegrown Juan Valdez brand.

The company sources the bulk of its inputs from local Colombian producers. The proposed investment will translate into increased income stream for Colombian coffee growers and thereby improve their living standards. In addition, this project, while not in a conflict area, supports the Government on-going strategy of supporting rural economies with the ultimate goal of reducing rural violence and promotes coffee as an alternative to illicit crops.

Support the company’s development: IFC’s investment will support the development of the company from a local player into a regional player by supporting its regional expansion plans.

Acting as a long-term equity partner and strengthening the company’s position for a potential IPO. IFC’s association with the company will serve as a stamp of “good housekeeping” and help reassure potential investors. The IPO will ultimately provide liquidity to farmers.

Strengthening HR practices: IFC will promote HR best practices especially in the retail chain hiring and training.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The following potential environment, health and safety and social aspects of Procafecol’s operations were analyzed:

- corporate environmental, social, and health and safety management systems;
- national and local government permitting requirements;
- recycling and treatment of process effluent and domestic waste water;
- minimization, recycling and disposal of solid wastes;
- fire and life safety and emergency response;
- occupational health and safety in operation;
- supply chain;
- plantation workers welfare, health and safety;
- fair trade and sustainability labeling;- public consultation and disclosure;
- corporate social responsibility efforts; and
- timely reporting on environmental and social performance to IFC.

The company has presented plans to address these issues to ensure that the proposed project will comply with the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. A discussion on the company’s plans to mitigate/minimize identified environmental and social impacts has been provided in the Environmental and Social Review Summary (ESRS).