Landscape Resilience Fund makes first investment in cocoa innovator Koa

cocoa farmer climate investment Ghana affordable finance

A crescendo of extreme weather events witnessed across the world exposes the urgency of investing in climate adaptation. In response to this challenge Landscape Resilience Fund (LRF) has made its first investment in Koa, a Swiss-Ghanain sustainable cocoa fruit company.

The $3.5 million investment, made alongside co-investors IDH Farmfit Fund, will support Koa to set up a new processing facility in Ghana, increasing production capacity more than tenfold by 2024 and creating additional income for up to 10,000 cocoa farmers.

Commenting on the investment, Urs Dieterich, Managing Director of the Landscape Resilience Fund said: “Increasing investment in adaptation will empower communities to better adapt to extreme weather events driven by climate change. That’s what today’s investment is all about — supporting an inspiring, socially and environmentally grounded business to reach even greater heights and have even more climate impact. But climate adaptation is chronically underfinanced.

Commerce, communities and conservation

Source: Koa

A critical challenge for the majority of cocoa farmers in West Africa is lacking access to affordable finance so that they can invest in their farms in a way that allows them to be more resilient to the increasingly extreme weather driven by climate change.

Sarah Afful, a cocoa farmer from the community Assin Ayigbo working with Koa, feels the disruption of seasonal patterns. “I experience unusually heavy or lack of rainfall, which negatively affects my cocoa yield.”

As a young social enterprise committed to sustainability and creating shared value, Koa’s fresh look at the cocoa pulp as a source of value has immense potential to boost the incomes and climate resilience of smallholder cocoa farmers in Ghana. Francis Appiagyei-Poku, Finance Director of Koa comments, “the investment from the IDH Farmfit Fund and the Landscape Resilience Fund allows us to extend our positive impact to new cocoa growing regions in Ghana. Making use of the previously lost cocoa pulp, we can increase and diversify smallholder farmers’ income.

This investment in a new factory will create an additional income for up to 10,000 cocoa farmers. Furthermore, the new production plant will generate 250 jobs creating new vocational opportunities for communities in rural Ghana.

Innovation in the heart of the rainforest

Koa’s mobile solar powered procession unit. Source: Koa

Koa has unlocked a new decentralised value chain around the previously unused cocoa pulp which boosts farmer income and improves climate resilience in two ways.

Firstly, it provides a meaningful increase in the income of cocoa farmers, paying them on the spot while transparently recording transactions. The whole process reduces food waste by 40%, thus, enhancing the land use of cocoa farms and reducing their carbon footprint.

In this process, the cocoa pods are opened on the farm, the fruit pulp is extracted using mobile solar units in the nearby communities and then pasteurised in a local factory creating jobs in these rural communities. This novel ingredient can be used for a variety of innovative creations in the food industry from juice, chocolate, pastries, icecreams to savory products.

Secondly, by training farmers in sustainable agricultural practices and post-harvest processing, Koa is able to reduce the environmental impact of cocoa farming. Drought and infrequent rain caused by climate change are an existential threat to these smallholder cocoa farmers. Average annual rainfall in Ghana is predicted to drop by over twenty percent by 2080.

Barbara Visser, COO of the IDH Farmfit Fund, comments: “Koa’s innovation makes it possible for farmers to increase their income significantly by selling their waste product, without having to make additional investment costs at their farms. Koa furthermore aims to create gender equal employment opportunities in rural communities and targets to reach 40% women farmers, which are in line with core objectives of the IDH Farmfit Fund.”

We are very pleased that today’s investment will support Koa in responsible value creation in the cocoa supply chain. These kind of disruptive and innovative solutions are key to catalyse the system change that is needed to improve the lives of these cocoa farmers.”

LRF catalyses funding in climate adaptation

Source: Koa

Momentum for large-scale investments in climate adaptation is growing. The LRF will continue to invest in SMEs that enable the most vulnerable people – in specific landscapes in the Global South – to effectively adapt to climate change. Our aim is that the initial funding creates a snowball effect – for every $1 million of funding from the LRF, we hope to unlock up to $3 million additional finance from commercial investors, for climate-resilient SMEs. The LRF’s active engagement has already catalysed over $5 million additional investment from the private sector in Koa.

As Dieterich concludes, “we must go further, faster, to ensure climate adaptation is a core pillar of our response to the climate crisis.”

The LRF’s landscape approach to building climate resilience unlocks positive benefits for biodiversity and gender equity. Investors and philanthropic funders interested in supporting this work can contact the Landscape Resilience Fund today to find out more.

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