How to Apply
Eligibility
All agricultural value chains are in principle eligible for financing by OVCF, as long as they are economically and financially sustainable and the Tripartite model FO – TO – OG can be developed with a significant outreach and impact. GoG agricultural policies and strategies, including FASDEP (Food and Agriculture Sector Development Policy), are however taken into account in the selection of the Value Chains, as well as KfW exclusion list. Apart from profitability of the OVCS and the mandatory tripartite arrangement FO – TO – OG, other key aspects to be assessed thoroughly for scheme approval are:
- Compliance with E&S standards: every new scheme is expected to comply with the Ghanaian national standards, and a proper and realistic action plan should be designed to ensure compliance in reasonable delays with IFC international standards.
- Resilience to climate change: possibilities to implement climate smart agriculture and other measures to enhance resilience in relevant geographical areas should be systematically assessed and included in the proposed business plan. FMT may link in this regard OVCS stakeholders to appropriate technical expertise.
- Potential synergies with other development actors for the provision of non-financial services to FO, TO and OG.
Requirements & How to Apply
TOs are the lead firms / companies that facilitate value chain competitiveness by processing,
trading, or wholesaling production of Outgrowers, targeted end beneficiaries of the Fund.
- TO is legally registered and complying with law and regulations
- TO must demonstrate its contractual linkage with Outgrowers and presence within operational area
- Job creation potential at TO level
- Sound business and financial status, including reliable accounting system
- Commitment, up to Board level, to work with Outgrowers in the OVCF scheme approach
- Willingness to accept and implement a pricing formula determining price for Outgrowers
- Demonstrated access to profitable markets
- Proven track record / high credit rating by an independent credit reference bureau
- Provide a current copy of its Environmental Permit (EP) and underlying Environmental Impact Assessment (EIA) study, which it was required to submit to the Environmental Protection Agency (EPA) at the application for its operating licence
- True dedication to collecting and analysing monitoring data- Willingness to share all collected monitoring data with OVCF and agreement that OVCF can use these data in its database for the purpose of monitoring, applying lessons learned and sharing best practices.
- Cooperating attitude and willingness to learn from peers and experts
TOs are the lead firms / companies that facilitate value chain competitiveness by processing,
trading, or wholesaling production of Outgrowers, targeted end beneficiaries of the Fund.
The Outgrowers shall live in a rural area and be member of an Outgrower association having a contractual relationship with the TO.
They should be categorized as smallholder farmers, based on a definition to be determined on a case by case basis by the FMT / TCC depending on the value chain (for instance for crop VC maximum number of hectares under cultivation, the number depending on the VC).OG association is legally registered and complying with law and regulations.
Have demonstrated need for medium to long-term finance (not below 3 years) to support their investment and operations in the VC.
Proven land use rights, so that the land can be used as collateral for the loan, or at least not be subject to repossession during the investment period.
Job creation potential at OG level.
Sound Governance and Management.
The group shall have proven track record / high credit rating by an independent credit reference bureau. If not possible to get this information through CRB, FMT to investigate whether the Group is creditworthy through other means.
Willingness to share personal finance information, in order to enable OVCF to calculate the Outgrowers’ potential income improvement starting base.
True dedication to collecting and analysing monitoring data.
Willingness to share all collected monitoring data with OVCF and agreement that OVCF can use these data in its database for the purpose of monitoring, applying lessons learned and sharing best practices.Cooperating attitude and willingness to learn from peers and experts.
- EXPRESSION OF INTEREST(EOI) BY FINANCIAL INSTITUTION TO ACCESS OVCF
This shall be submitted to the BoG for its opinion on the Financial Institution - BUSINESS PLAN PREPARED BY TECHNICAL OPERATOR/OFFTAKER INCLUDING THE FINANCIAL REQUIREMENTS OF OUTGROWERS
To be submitted by TO to Participating Financial Institution(PFI)/Financial Operator (FO) with a copy to the Fund Manager, OVCF. - COMPLETE OVCF APPLICATION FORM BY TO.
- ENVIRONMENTAL AND SOCIAL (E&S) CHECKLIST – To be completed by TO and signed off by FO.
- CLIMATE SCREENING CHECKLIST – To be completed by TO.
- PAST 3 YEARS AUDITED ACCOUNTS – To be submitted by FO. This should include:
- Loans to the Agric Sector for the past 3 years.
- Overall NPLs for the FO, and
- NPLs for the Agric Loans.
- PAST 3 YEARS AUDITED ACCOUNTS-To be submitted by TO.
- INDICATIVE TERM SHEET FROM THE FUND stating the Interest Rate, Tenor and other conditions specific to the Value Chain being refinanced.
This could be done during the Due Diligence Phase when the possibility of a deal between the Fund and FO is highly likely.
Interested in becoming a partner,
Request for an Application
OVCF Schemes
The Fund is nationwide but currently, it covers the following 51 districts in 13 Regions.
Klo Oil Palm Outgrowers Association (KOPOA) & Asare Odometa Plantations Limited (AOPL)
Introduction
The project involves Oil Palm by KOPOA with AOPL as the Technical Operator (TO) through the Upper Manya Kro Rural Bank Limited (UMKRBL) in the Eastern Region, which serves as the Financial Operator (FO). The clients are located within Asesewa in the Eastern Region.
- To establish and maintain 300ha of oil palm plantations for ninety eight (98) Outgrowers;
- To expand the existing oil palm processing facilities of the Technical Operator from 0.5mt/hr to 1.0mt/hr; and install a fully mechanised mill to replace the existing Gratis Foundation mill;
- Grant request for the strengthening of a nascent Outgrower Unit to ensure higher productivity of its members, negotiating skills on pricing of produce with TO, etc.
The UMKRBL/OVCF Term Loan shall be repaid by instalments adapted to the production cycle of the value chain, over a period of seven (7) years including one (1) year moratorium and 13 years with four (4) years moratorium on principal repayment and interest payments for AOPL and KOPOA, respectively.
- AOPL has the technical competence and adequate raw materials to assist the outgrowers to develop the oil palm plantations.
- AOPL buys all palm fruits produced by the outgrowers, giving assurance of an already existing market for the produce.
- The project has a high potential for job creation and poverty reduction in the area
BADU KAAKYIRE COMPANY LIMITED
(B. KAAKYIRE LTD) & Rice Out-growers Value Chain
Introduction
The project involves rice production by BADU KAAKYIRE COMPANY LIMITED (B. KAAKYIRE LTD as Technical Operator and its Outgrower Farmers with Opportunity International Savings and Loans (OISL) Company as the Financial Operators. The clients are located within New Edubiase in the Ashanti Region
The whole objective is to increase the productivity and production of rice outgrowers to enable them to collectively supply paddy to the Technical Operator (TO), B. Kaakyire Limited. Thereafter, farm expansions will lead to higher quantities delivered. This will be done to achieve optimum output by: i) strengthening the capacity of Out-growers to cultivate more for reliable supply of paddy, ii) enhancing the TOs processing capacity with a view to minimizing post-harvest losses and improving profitability iii) improving delivery of farm inputs to targeted farmers, and iv) Timely evacuation of harvested and threshed paddy to the mill.
The main objective of the facility is as follows
- Rice cultivation (Land preparation, Fertilizer, weed control, input supply and harvesting services and Harvesting)
- Fixed Assets Requirement
- Environmental and Safety Management
The tenor of the OISL/OVCF facility is Six months payment period with 5 months moratorium of principal and interest. Repeat loans by way of services and inputs in-kind, to be given to out-growers who service their debt at the end of each year over the project duration of 36 months.
- Kaakyire Ltd has the capacity and competence to support the outgrowers develop their various farms and expand.
- The TO shall buy all the paddy produced by the outgrowers, giving assurance of an already existing market for the produce.
- The project has a high potential for job creation and poverty reduction in the area.
Rubber Plantation Ghana Limited(RPGL) Association of Eastern Region Rubber Outgrowers (AERRO)
Introduction
The project involves financing the production of rubber by AERRO through the National Investment Bank (NIB). The plantations belonging to smallholder farmers under the project are located at Kwaebibrim, Atiwa, West Akim, East Akim, Fanteakwa and Suhum-Kraboa-Coaltar districts in the Eastern Region.
The loan was used to establish and maintain 2,200 hectares of rubber plantation. It involves about 1261 outgrowers farmers producing latex and cup lumps of rubber to the Rubber Plantations Ghana Limited (RPGL) who serve as Technical Operator, on contract.
The NIB/OVCF Term Loan shall be repaid by monthly instalments adapted to the production cycle of the value chain over a period of Twenty-Two (22) years including eight (8) years moratorium on the principal repayments and interest payments, commencing from the date of first disbursement.
- RPGL has the technical competence, enough planting materials/stumps and agro inputs to assist the outgrowers to develop the rubber plantations.
- RPGL shall buy all rubber latex produced by the outgrowers, giving assurance of an already existing market for the produce.
- Adequate strategies have been put in place to sanitize the Land Documentation process.
- The project has a high potential for job creation and poverty reduction in the area. The project provides direct jobs for 1261 farmers under the outgrower scheme. In addition, the plantation project unit employs staff to manage the outgrower project.
- The project does not discriminate against women in the offering of employment at the plantation. It is anticipated that about 40% of the labour force at the plantation and processing units will be women.
Farm Direct Technologies Company Limited (FDTCL)
Introduction
The project involves Pineapple production by Farm Direct Technologies Limited (FDTCL) as Technical Operator and its Ingrower/Outgrower Farmers with the Agricultural Development Bank acting as the Financial Operator. The clients are located within Ekumfi in the Central Region.
The business model entails increasing the productivity and production of the pineapple out-growers to enable them to collectively supply a minimum set amount of pineapples to Ekumfi Fruits & Juices Ltd (EF&J Ltd). Thereafter, farm expansions will lead to higher quantities delivered in later years. This will be done to achieve optimum output by: i) strengthening the capacity of Outgrowers for reliable supply of pineapple to EF&J’s factory, ii) enhancing the TO’s post-harvest handling.
The loan is meant for the following:
- Pineapple cultivation (Fertilizer, agro-chemicals, planting materials, Tools and equipment, Harvesting
- Transport, Irrigation based assets and shed
- Environmental and Safety Management Plan
The tenor of the ADB/OVCF facility is 24 months including 18 months moratorium. The production loan has been structured with 18 months moratorium and 5 years repayment period making a total of 6.5 years
- FDTCL has the competence and adequate materials to assist the ingrowers /outgrowers to develop the various farms and well as expand.
- Ekumfi Fruits and Juice Factory shall buy all the fruits produced by the outgrowers, giving assurance of an already existing market for the produce.
- The project has a high potential for job creation and poverty reduction in the area
- The processed fruit juice to some extent substitutes the imported ones thereby saving forex for the country.
