DEG of Germany and AfricaConnect to finance chocolate production facility in Ghana
DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH is now providing funds from the AfricaConnect program to help set up a chocolate production facility in Ghana.
AfricaConnect is funded by the Federal Ministry for Economic Cooperation and Development (BMZ). The EUR 2 million loan is earmarked for the Munich-based start-up firm fairafric GmbH.
Fairafric has been selling fair produced chocolate bars since 2016. They are currently produced in partnership with a company in Ghana. In the spring of 2019, family-run chocolate manufacturer Ludwig Weinrich KG from Herford, Germany, took a stake in the start-up.
With the aim of better managing the production process in Ghana and being able to meet the increasing demand for fair trade organic chocolate, fairafric is now setting up its own production plant, covering the process from cocoa harvesting to manufacturing and packaging.
The subsidiary fairafric Ghana Ltd. is creating more than 80 jobs. In addition, the company is receiving the cocoa beans from 5,000 small farmers, enabling them to earn higher incomes for themselves and their families.
Through AfricaConnect, DEG has been offering European companies a new financing product for investments in Africa since the summer of 2019. Companies also benefit from direct access to DEG’s Africa expertise and its network.
“We are focusing particularly on companies with a long-term interest in Africa that want to create positive added value locally. Fairafric is a good example of this, because by expanding the value chain in Ghana, the company is helping to create skilled jobs locally, ”said Petra Kotte, Head of the Financial Institutions and German Business Division at DEG.
“Although 70% of the world’s cocoa harvest comes from West Africa, the countries only receive a fraction of the sales generated through chocolate. By producing locally, at times more money can flow into the country compared to simply exporting the cocoa beans, ”added Hendrik Reimers, founder and CEO of fairafric.
DEG has received over 100 surveys since the AfricaConnect program was launched. At present it is pursuing around 20 investment schemes as promising. Besides fairafric, the Tunisian subsidiary of a German car parts supplier is receiving a loan from AfricaConnect funds.
