Commodity Value Chain Sustainable Investment Fund

THE COMMODITY VALUE CHAIN SUSTAINABLE INVESTMENT FUND (CVCSI) IS A USD 20M FUND THAT PROVIDES STRUCTURED COMMODITY FINANCE TO PARTICIPANTS IN AGRICULTURAL VALUE CHAINS IN THE CIS (Commonwealth of independent states) AND SUB-SAHARAN AFRICA REGIONS. TARGET INVESTEES INCLUDE PRIMARY PRODUCERS, PROCESSORS, TRANSPORTERS AND WHOLESALERS OF AGRICULTURAL COMMODITIES. THE FUND IS STRUCTURED AS A SUB-FUND FOR SIFEM ONLY, PERMITTING THE FUND’S GEOGRAPHIC SCOPE TO BE LIMITED ONLY TO SIFEM’S TARGET COUNTRIES. IN 2014, SIFEM INVESTED USD 5M IN CVCSI FOR THE CIS REGION AND IN 2016, COGNISANT OF SUSTAINABLE COMMODITY TRADE FINANCE’S DEVELOPMENT IMPACTS, IT PROCEEDED WITH A SECOND LARGER INVESTMENT OF USD 15M TO SUPPORT THE AGRICULTURAL SECTOR IN SUB-SAHARAN AFRICA. HOWEVER, THE LATTER DID NOT MATERIALISE.

Structured Commodity Trade Finance refers to short-term, transaction-based lending that mitigates risks by taking the traded goods as collateral. This provides significant risk reduction for the lender and enables participants in agricultural value chains to access much needed financing. CVCSI brings smart liquidity to a highly important sector of SSA’s economy which is often neglected by local banks. CVSCI effectively takes on a role as the arranger of trade, thus connecting producers, importers/exporters and consumers of soft commodities. Beyond global trade, with a focus on soft commodities, the Fund has strong beneficial development effects. CVCSI finances mostly small, medium and mid-market companies involved in agriculture and food production, which are noted for being risky, but also highly employment-generating, as well as contributing to food security and commodity pricing stability. Enhancing food security includes meeting objectives of improved affordability, availability, quality and safety. By financing food production, processing, storage and transport to market, the Fund is closely aligned to these objectives.

The Fund is managed by INOKS Capital SA, a Geneva based investment firm established in 2004. Since 2008, INOKS is focused solely on structured commodity trade finance, and has acquired extensive expertise in this field by linking producers, processors, distributors and purchasers of commodity value chains. The Fund Manager has incorporated high Environmental, Social, and Corporate Governance (ESG) investment principles in its investment process.