A global fund mechanism to finance over 25 million coffee farmers globally was proposed by the United Nations Industrial Development Organisation (UNIDO) and the International Coffee Organisation (ICO). The proposed global funding mechanism calls for collaboration among industry stakeholders, financial institutions, and public sectors to mobilise both public and private funds. It suggests leveraging blended finance strategies combining grants and investments to support sustainable development in the coffee sector. Currently, 5.5 million coffee farmers live in extreme poverty. The global demand for coffee is projected to rise by 2.2pc annually over the next two decades. According to a study by Columbia University, an estimated 10 billion dollars annually is required to advance Sustainable Development Goals (SDGs) in coffee-producing regions. Around 1.4 billion dollars in annual finance is needed for productivity enhancement and climate change adaptation. The initiative addresses critical sustainability challenges in the coffee sector, particularly focusing on climate change impacts and financial instability among growers. It underscores the urgent need for funding to tackle climate change and structural issues such as income disparities, regulatory constraints, price volatility, productivity challenges, quality standards, and market access barriers faced by coffee farmers. UNIDO's model includes the Ethiopian Coffee Fund, supported by the Italian Development Cooperation, which aims to provide concessional loans and technical assistance to support impactful investment opportunities through the Commercial Bank of Ethiopia (CBE). The funding proposals will be solicited from private enterprises, local cooperatives, and unions through a series of calls. It will be evaluated using an innovative impact assessment tool to rank them based on their potential impact, investment risks, and bankability.
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