Project description – Value chain agro finance project

The project at a glance

Project name:

Value Chain Agro Finance

Goal:

Support to selected value chains across the Kyrgyz Republic to produce competitive agri-food products in a sustainable way and promote the use of good agricultural practice and best available techniques in processing and distribution

Co-financed by:

The European Union (EU), the European Investment Bank (EIB), and the Federal Ministry for Economic Cooperation and Development (BMZ) of the Federal Republic of Germany, which channels the funding through the German Development Bank (KfW)

Ministries:

Ministry of Water Resources, Agriculture and Processing Industry of Kyrgyz Republic

Implemented by:

GOPA AFC GmbH and GOPA-CAICo

Time of implementation:

April 2023 – May 2027

Project office location:

Ministry of Finance, Bishkek, 58a Erkindik blvd

The “Value Chain Agro Finance” Project in Kyrgyzstan aims to enhance agricultural production and quality in the Kyrgyz Republic. The Project envisages the provision of technical assistance to producers and processors of the agricultural products selected value chains (VCs) across the Kyrgyz Republic. The involvement of such micro, small and medium enterprises as project beneficiaries for the project support will enhance their knowledge on green technologies, climate-smart farming, as well as environmental and social standards. This is crucial to improving the quality of products, enhancing their competitiveness, decreasing negative impacts on environment and consequently strengthen VCs and enhance competitiveness. The project further supports SMEs engaged in agro-processing and operating in urban areas. The Project was officially launched on April 25, 2023.

The project is commonly funded by European Union (EU), the European Investment Bank (EIB), and the Federal Ministry for Economic Cooperation and Development (BMZ) of the Federal Republic of Germany, which channels the funding through the German Development Bank (KfW) with a total budget of EUR 37 m. The Project loan funds will be made available in local currency through selected commercial banks to participants of agricultural value chains. Accordingly, the Project will provide support on access to credit resources through tailored capacity building to participants of agricultural value chains.

The Project is implemented by the German consulting company GOPA AFC in consortium with their local partner GOPA-CAICo and support and active participation of the Ministry of Finance and the Ministry of Water Resources, Agriculture and Processing Industry of the Kyrgyz Republic. The consortium will aim to establish best agricultural practices in primary production, introduce best available technologies for processing and distribution in the agro-food sector, implement international certification systems, and integrate farmers into value chains. The Consortium is further supporting the selection of eligible partner banks for on-lending of the credit lines.

SPECIFIC OBJECTIVES OF THE PROGRAM

Providing sustainable access to long-term finance to Micro, Small and Medium Enterprises (MSMEs) to purchase agri-food machinery and equipment and enable them to efficiently use this equipment.

Enabling financial institutions to provide sustainable long-term finance to MSMEs.

Developing and supporting competitive agri-food value chains contributing to better competitiveness and thereby to increased profitability and incomes. This will increase food security in the country through enhanced commercial activity in the national and international markets.

Establishing environmentally sustainable agricultural best practices at the MSME level.

Integrating smaller farmers into commercial value chains by standardizing production systems and increasing quality.

Support of implementation of the international certification systems to agri-processors leading to products' quality increase, improvements in environmental and sanitary standards and practices in the Kyrgyz Republic.

Food safety laboratory advancements by elevating the standards of agri-food state owned laboratories, introduction of new analytical methods and maintenance skills ensures these labs can operate independently, thereby reducing dependence on external maintenance services.

By identifying critical parameters for food safety and quality, the project collaborates with public laboratories, enhancing their technical expertise.

CLIMATE-SMART AGRICULTURE

The project recognizes the challenges posed by climate change and actively promotes climate-smart agricultural practices. Initiatives like the adoption of no-till technology show innovative solutions that empower farmers to adapt to changing weather patterns and optimize yield even in drought conditions.

The Value Chain Agro-Finance Project stands as a testament to Kyrgyzstan's commitment to agricultural excellence. Through collaboration, innovation, and strategic investments, the project paves the way for a vibrant and sustainable agricultural future in the country.

MISSION

The Value Chain Agro-Finance Project's mission is to create a resilient, sustainable, and prosperous agricultural sector in Kyrgyzstan. By fostering innovation, enhancing financial accessibility, and ensuring food safety, the project aims to empower farmers, elevate agricultural standards, and contribute significantly to the nation's economic growth.

GOALS

Empowering agri-businesses:

Provide micro, small, and medium enterprises (MSMEs) with sustainable access to long-term finance. This support enables them to procure cutting-edge agri-food machinery and equipment, fostering efficient utilization.

Fostering competitive value chains:

Develop and bolster agri-food value chains, enhancing their competitiveness. This will not only fortify economic stability but also amplify food security through expanded commercial engagements in national and international markets.

Sustainable agricultural practices:

Champion environmentally sustainable agricultural practices at the MSME level. By promoting eco-conscious methods, the project ensures that agricultural advancements align with ecological well-being, creating a balance between progress and environmental harmony.

Integrating smallholder farmers:

Integrate smallholder farmers seamlessly into commercial value chains. This integration revolves around standardizing production systems and enhancing product quality. By elevating standards, smallholder farmers become active participants in lucrative commercial ventures.

Promoting climate-smart agriculture:

Promote climate-smart agricultural practices, including innovative techniques like no-till technology. By embracing forward-thinking and sustainable solutions, the project enhances agricultural resilience, enabling farmers to effectively adapt to challenges posed by climate change.

Building financial sustainability:

Enable financial institutions to provide sustainable long-term finance to MSMEs. By fostering financial stability within the sector, the project ensures the continuous flow of capital, nurturing agricultural enterprises and supporting their long-term growth.