Sustainable plantations of coffee, cocoa and cotton: Proparco supports ECOM towards biochar coproduction

ECOM Agroindustrial Corporation Ltd is a family-owned company based in Switzerland and a global leader in sustainable sourcing and trading. Specialising in coffee, cocoa and cotton, it has shared its expertise with over 650,000 farmers in 40 countries for more than 175 years, building a solid reputation and demonstrating a deep commitment to certified sustainable agriculture.

True to its objective of maximising positive impact on sustainable development within global agricultural value chains, Proparco has supported ECOM since 2020 in improving its environmental and social risk management. More specifically, Proparco is supporting the company in its commitment to decarbonisation and the sustainable management of natural resources, which are at the heart of our strategic priority of protecting the planet in the face of climate and biodiversity challenges.

Today, Proparco renews its commitment to ECOM by deploying two instruments in its favour:

• Technical support to assist the company in developing a 'comprehensive biochar strategy'.
• A senior loan is aimed at supporting ECOM’s operations and investments throughout the supply chain in origin markets, particularly in Africa, by financing its working capital needs amid high and volatile cocoa and coffee prices.

Technical support to demonstrate the economic viability of biochar

Biochar is a type of charcoal produced from biological waste generated by coffee and cocoa processing facilities in Africa in the absence of oxygen. This process transforms biomass into a stable carbon material. This offers farmers, who are already experimenting with the process alongside ECOM, the opportunity to amend and regenerate their soils.

Biochar improves water retention, reduces reliance on chemical inputs through better fertility and sequesters carbon, thus contributing to biodiversity preservation and the fight against climate change.

However, large-scale biochar projects currently face difficulties in assessing and guaranteeing their economic viability. Proparco's technical support will assist ECOM   with its 'comprehensive biochar strategy', as well as improving its processes and tools to optimise biochar projects and strengthen the training of local teams.

Supporting ECOM in developing a tailored global biochar strategy enables Proparco to collaborate with a major player in agricultural trading, which exerts significant influence over its upstream value chain. This is where the majority of emissions and ecological and human impact challenges are concentrated.

Biochar also has a positive impact on local communities, benefiting smallholder partners of ECOM directly through the valorisation of their waste, improved yields and the promotion of more environmentally friendly agricultural practices.

A long-term loan supporting certified agriculture

More generally, ECOM's strategy, implemented for over a decade, aims to establish the group as a supplier of products from certified sustainable agriculture, while pursuing a net-zero trajectory by 2050. Currently, almost 50% of the group’s supplies come from Rainforest Alliance-, Fair Trade-, and Utz-certified productions, among others.

In April, Proparco also decided to grant ECOM a USD 35 million loan (mainly intended for the African continent) as part of a syndicated financing totalling USD 155 million, arranged by the Dutch entrepreneurial development bank FMO alongside British International Investment (BII) and other European financing institutions, such as the German DEG and the Belgian BIO. This financing was granted due to the implementation of environmental and social policies requiring longer-term visibility.

This financing will enable ECOM to protect itself more effectively against the volatility of raw material prices and strengthen its long-term role in transforming rural economies by supporting smallholder farmers and promoting sustainable practices within its value chains.