Fertilizer Trade Credit Guarantee Management Tender, Cote d'Ivoire - 78494954

Procurement Summary

Country : Cote d'Ivoire

Summary : Fertilizer Trade Credit Guarantee Management

Deadline : 22 Feb 2023

Other Information

Notice Type : Tender

TOT Ref.No.: 78494954

Document Ref. No. :

Competition : ICB

Financier : African Development Bank (AfDB)

Purchaser Ownership : Public

Tender Value : Refer Document

Purchaser's Detail

Name :Login to see tender_details

Address : Login to see tender_details

Email : Login to see tender_details

Login to see details

Tender Details

Tenders are invited for Fertilizer Trade Credit Guarantee Management in Kenya

1. Introduction
The African Development Bank is the premier Pan-African development financial institution,
promoting economic growth and social progress across the continent. The Bank-s development
agenda is delivering the financial and technical support for transformative projects that will
significantly reduce poverty through inclusive and sustainable economic growth.
African leaders established the Africa Fertilizer Financing Mechanism (AFFM) during the 2006
African Green Revolution Summit in Abuja. In the Abuja Declaration, African Union Member
States committed to an initiative to improve agricultural productivity by providing financing
required to improve the use of fertilizers in Africa. The Summit charged the African
Development Bank with to establish and manage the AFFM. It also enjoined African Union
Member States to work together to boost fertilizer use in Africa to reach the target of at least 50
kg of nutrients per hectare. The AFFM is currently housed within the Department of Agriculture
and Agro-industry of the Bank.
The overall objective of the AFFM is to assist African Countries in increasing agricultural
productivity within the context of the Agenda 2063, the 2030 Agenda, and the Malabo
Declaration.
Since 2019, AFFM and local partners have successfully implemented credit guarantee
programs, notably in Ghana, Cote d-Ivoire, Tanzania, and Nigeria. As a result, more than 1
million smallholder farmers have been able to obtain and utilize approximately 112, 000 metric
tons of fertilizer via 100+ hub agro-input dealers.
To implement its mandate, the AFFM Strategic Plan 2022-2028 prioritizes initiatives to
increase access and the appropriate use of fertilizer by increasing access to finance and technical
assistance through facilitation and capital investments. The Strategic Plan builds on three
strategic pillars:
(i) Strengthening the fertilizer sector through access to finance by designing hybrid
financial instruments in order to meet the the sector's financial needs;
(ii) Supporting the development of viable policy reforms to improve production, trade and
utilization of fertilizer; and
(iii)Facilitating smallholder farmers- access to inputs and technical assistance.
In its seven-year strategic plan, AFFM aims to facilitate 16 million commercially oriented
smallholder farmers' access to 2, 000, 000 metric tons of fertilizer and other inputs in 15 countries
in sub-Saharan Africa through support to SMEs involved in inputs supply and distribution. This
will help reach the target of fertilizer application of at least 50kg nutrients per hectare and
productivity increase of at least 35% on 13 selected Strategic commodities.
One of the key activities for the AFFM is to support the provision of credit guarantees and other
financial solutions along the fertilizer supply chain and, as appropriate, at growth leverage
points in agricultural output value chains.

2. The program rationale and description
Many African countries depend on Ukraine and Russia for wheat, maize, sunflower oil,
and barley. Ukraine and Russia are major exporters of these agricultural commodities
accounting for 30% of the world-s wheat, 27% of barley, 17% of maize and 70% of
sunflower oil. With the war in Ukraine the price of these grains and oil seeds have soared
globally with wheat futures increasing by 44% between January and April 2022. On the
African continent, prices of wheat have increased by 42% in Egypt, 31% in Tunisia, 25%
in Nigeria, 24% in Tanzania and 17% in Kenya. With the disruption of the war in Ukraine,
there is an estimated supply gap of 30 million metric tons (MT) of wheat, maize, and oil
seeds on the continent.
Russia also accounts for 15% of the global trade in nitrogenous fertilizers and 17% of
exports of potash fertilizer and is a major supplier of fertilizer to the African continent. The
war in Ukraine has deepened the shortfall in fertilizer, driven prices higher, lowered
accessibility, threatening agricultural production as many countries head into the planting
season. Fertilizer is three to four times more expensive in most African countries compared
to 2020 and there is an estimated gap in fertilizer supply of Mt 4 million in Sub-Saharan
Africa. Energy prices are high and climbing, and the risk that food prices will continue to
rise is very real. Boosting the local production of cereals and oil grains is the most effective
and efficient way to build the resilience of Africa-s food systems to respond to these
circumstances and mitigate risks to supply in the short to medium term.
The African Emergency Food Production Facility (AEFPF) is the Bank-s rapid response
framework to address the food crisis arising from the war in Ukraine, climate change, conflicts,
and pests and diseases. The AEFPF will help countries address the risks to their food security
by increasing food production through delivering a full package of technology and extension
services to millions of farmers and increasing countries- access to fertilizer and other inputs on
a national scale.
The Bank has identified immediate to short-term and medium-term measures to increase access
to fertilizer to its Regional Member Countries (“RMCs”) as a thematic priority under the
AEFPF. The support under the AEFPF-s pillar is two-folds: (i) Financing for the fertilizer value
chain under sovereign operations that meet the immediate liquidity requirements for RMCs to
procure fertilizer; and (ii) use of the Bank-s Africa Fertilizer Financing Mechanism (AFFM)
trade credit guarantees to deliver fertilizer needs to importers, aggregators, and other large users.
The second sub-component is building upon the AFFM-s success to provide credit guarantees
to importers, aggregators, and other large fertilizer users.
In support of the Bank-s AEFPF, the Norwegian Agency for Development Cooperation
(NORAD) has contributed funds into the AFFM to implement trade credit guarantee projects
in Kenya. The credit guarantee project “Fertilizer Financing for Sustainable Agriculture
Management (FFSAM)” that will be implemented for the period up to thirty-six (36) months,
is expected be leveraged at least ten (10) times the credit guarantee amount, enabling access to
at least Mt 28, 000 of fertilizer to 285, 000 smallholder farmers in Kenya.
To achieve this mandate and further help de-risk the financing of the fertilizer value chain, the
AFFM will work with qualified fertilizer suppliers or implementing agents interested in
receiving AFFM-s trade credit guarantees. Under this co-guarantee scheme, the risk will be
shared with AFFM on a pari pasu basis (50-50), to avail inputs on credit to hub agro-

3
input dealers1 and aggregators in the fertilizer/inputs value chain. AFFM will partner with
suppliers directly or through implementing agents to implement a trade credit guarantee project
of $2, 000, 000 in each country.
In this regard, the supplier signs a guarantee agreement with the African Development Bank on
behalf of the AFFM or with any other guarantor. The supplier is also responsible for the
guarantee management and provision of capacity building to hub agro-input dealers and, where
applicable, smallholder farmers. The interested suppliers can partner with locally registered
technical implementing agents if required.
Under indirect collaboration with suppliers through an implementing agent, the Bank, on behalf
of the AFFM, signs a guarantee agreement with the agent. Alternatively, secure suppliers'
willingness to sign a guarantee agreement with the Bank or any other guarantor. The
implementing agent will be responsible for selecting suppliers and hub agro-input dealers to
participate in the program. The implementing agent and suppliers will conjointly be responsible
for the guarantee management and provision of capacity building to hub agro-input dealers and,
where applicable, smallholder farmers.
3. Activities to be carried out
3.1.Facilitate access to finance
- Conduct due diligence and risk assessment on fertilizer suppliers & Hub Agrodealers
and select those qualified to minimize risk exposure to the credit guarantee fund
- Execute the trade credit guarantee and monitor access fertilizer on credit to hub
agrodealers from select fertilizer companies
- Put in place the risk management (assessment, mitigation and monitoring) tools to
determine individual enterprises risk profile and develop a risk mitigation plan to
minimize risk of default
- Document fertilizer volumes and value sold on credit to identify financial leverage of
the credit guarantee
- Monitor credit repayments for an early signalling/red flag potential default of qualified
buyers (agro-input dealers)
- Undertake activities (monitor) for any potential debt collection, payment and recovery
process.
3.2.Support the increased access to fertilizer
- Create upstream and downstream linkages to enhance mutually beneficial transactional
relations between the parties along the chain and strengthen the distribution channel up
to the farmer
- Profile and map the participating Hub Agrodealers/their networks to downstream to
smallholder farmers to help to determine how many retail agro-dealers can be reached
by the Hub agro-dealers and the distances that farmers travel to access inputs
- Build the capacity of participating suppliers, Hub Agro-dealers and maturing retail agro
dealers on selected topics including among others, credit control, risk management and
inventory systems, stock management, cashflow management and pricing/cost control
and extension services.
- Undertake the project specific Environmental and Social Impact Management Activities
to ensure proper storage, handling and distribution to prevent alteration of fertilizer and
ensure quality fertilizer distributed to farmers.

Documents

 Tender Notice