USAID Facilitates Working Capital Loan, Debt Facility for IBIS Rice in Cambodia
BANGKOK, DECEMBER 18 2020 – The United States Agency for International Development (USAID), through its Green Invest Asia project, has facilitated a financing agreement between Phnom Penh Commercial Bank (PPCBank) and IBIS Rice Conservation Co Ltd. (IBIS Rice) to increase wildlife-friendly organic rice sales. In addition, USAID supported the creation of a debt facility for the company’s longer-term finance needs. IBIS Rice supports smallholder farmers to grow organic, wildlife-friendly jasmine rice, which helps protect endangered species and earns farmers a premium price.
“We are excited to harness the power of the private sector to protect Cambodia’s natural resources while improving the lives of its citizens,” said Veena Reddy, USAID/Cambodia Mission Director. “This agreement shows us the potential when we complement growth with conservation.”
IBIS Rice is named after the Giant Ibis, Cambodia’s national bird and the world’s largest ibis, which holds near-mythical status for birdwatchers and conservationists due to its critically endangered status. The few remaining birds worldwide are found in Cambodia.
Founded in 2009, IBIS Rice incentivizes local communities to engage in conservation through the purchase of organic jasmine rice at a premium price. IBIS Rice farmers commit to no logging, hunting, or use of chemicals, thereby protecting the landscape and its species. Their rice is certified wildlife-friendly and organic to European Union and U.S. Department of Agriculture (USDA) standards, and is sold globally to high-end markets, including Europe and Canada.
IBIS Rice now works with 1,500 wildlife-friendly farmers, paying them a premium of 50 percent above-market price for organic, wildlife-friendly (Pkha Rumduol) jasmine rice. Deforestation in these communities has fallen by 75 percent.
As IBIS Rice recruits and trains more farmers through grant support from USAID Greening Prey Lang, a USAID Cambodia funded activity which improves conservation, governance, and community livelihoods in northern Cambodia, additional working capital financing is needed for larger paddy purchases. Demand for IBIS Rice currently outstrips supply.
USAID Green Invest Asia, which supports agriculture and forestry businesses in Southeast Asia improve their sustainable commodity production and prepare them for investment, provided IBIS Rice technical assistance to secure financing from PPCBank through capital matchmaking and investment preparedness services.
Nick Spencer, CEO of IBIS Rice, based in Phnom Penh said: “Connections that USAID Green Invest Asia’s advisor have in Cambodia and their understanding of the market has been invaluable, as has their support in creating a pitch that speaks to the requirements of and justification for the ask. It’s been incredibly helpful.”
PPCBank opened its doors in 2008 as a commercial bank with a strong commitment to social impact.
“We really appreciate the benefits IBIS Rice and its customers deliver farmers. This was immediately interesting to us, however we also need to see a sound business case to be able to offer financing,” said Nhak Kimsroy, PPCBank’s Senior Vice President. “We could see from the certifications that IBIS Rice holds, and the strong commitments its international buyers make, that this was a strong proposal. This agreement marks the beginning of long partnership, and we look forward to the company’s growth.”
Spencer, Ibis Rice’s CEO, said: “We make very strong commitments to our farmers by buying all of the paddy they can produce that meets our compliance standards; this means we need financing in place to purchase. We found that PPCB understood our business needs, shared a passion for our mission and that they were impressed by the relationships we have built with international buyers. Our shared values will make for a long and fruitful partnership.”
Christy Owen, head of USAID Green Invest Asia, congratulated both sides. “IBIS Rice’s partnership with PPCBank is a great example of what USAID Green Invest Asia does, linking commercial financing with proven carbon savings and social impact. This meaningful partnership will benefit an entire supply chain.”