APIBC NEWS : 24th Apr 2017
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Vanuatu’s Tanna Coffee buzzing after $656,000 impact investment

Vanuatu coffee producer Tanna Coffee has secured a $656,000 investment from impact investors in a milestone deal for the region.

— By The Difference Incubator (TDi)

Pictured: Caleb Jarvis, Trade & Investment Commissioner, PTI Australia and Terry Aldlington, Managing Director Tanna Coffee.

Vanuatu coffee producer Tanna Coffee has secured a $656,000 investment from impact investors in a milestone deal for the region. Facilitated by The Difference Incubator (TDi), the significant private capital injection will help grow Tanna Coffee’s output five-fold, supporting more than 750 farmers and their families on the remote island.

The investment was made possible by the Pacific Investment Readiness Pilot, a partnership between TDi and the Department of Foreign Affairs and Trade (DFAT), which helps create investable opportunities for impact investors. The investment is the second capital injection into the Pacific made by the Genesis Impact Fund set up by TDi’s partner Benefit Capital. As part of the pilot, TDi’s team is helping businesses such as Tanna Coffee to do good, and make money, ultimately contributing to sustainable economies across the Pacific and reducing aid reliance.

Tanna Coffee grows, farms, processes, roasts, and distributes premium single-origin coffee on its beautiful plantation 400 metres above sea level, nourished by Vanuatu’s rich volcanic soil. Two years ago, the plantation of 750,000 coffee trees was almost totally wiped out when tropical Cyclone Pam devastated Vanuatu’s 84 islands. Despite this setback, the company has rebuilt its operation and produced its first significant harvest since Cyclone Pam and now plans to directly re-engage all of the smallholder coffee farmers, many of whom lost everything during the cyclone.

The $656,000 investment will be used to develop 200 hectares of land and to increase Tanna Coffee’s production from 20 to 100 tonnes of roasted coffee annually. The land will be distributed in one-hectare plots to 200 farming families for them to grow coffee. TDi worked with Tanna Coffee over twelve months to help build the business and secure capital from impact investors. This process included developing their business model and a framework to measure their impact, as well as negotiating the business’s valuation and terms of the investment.

Tanna Coffee’s managing director Terry Adlington said that this major investment would not only amplify the company’s overall impact on the livelihoods of 750 farmers it works with, their families and communities on Tanna Island, but would also ultimately have a significant and positive effect on Vanuatu’s economy. “When I arrived in Vanuatu to work with Tanna Coffee 20 years ago, farmers were being paid 20 vatu (AUD$0.25) per kilogram of coffee cherry. By changing our processes to add more value to the end product, we are now able to pay farmers 270 vatu (AUD$3.20), which we see flowing directly back into the local community,” Mr Adlington said.

“We have worked with TDi on a plan for sustainable growth to increase coffee production to 100 tonnes over the next five years. We also anticipate farmers’ income will increase by 20 per cent as a result of the investment, increasing their living standards, improving lifestyles and providing the ability to afford consistent education for their children...”

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