Investment blueprint

The Landscape Resilience Fund (LRF) has provided impact investment to scale the use of agricultural by-products for sustainable livelihoods. The project, focused on Ghana, involves a Swiss-Ghanaian social enterprise, Koa, which upcycles unutilised cocoa pulp into products such as juice, concentrate, and dry powder. This initiative supports a circular economy by reducing waste and increasing agrobiodiversity, while also improving smallholder farmers’ incomes.

The project operates through a structured financial model, using a low-interest debt instrument. In 2022, Koa secured a USD 3.5 million, five-year low-interest loan from the LRF and the IDH Farmfit Fund. This financing was used to establish a new processing facility in Ghana.

The investment also played a catalytic role in attracting additional commercial capital. Following the loan, Koa secured a USD 2 million equity investment from a Luxembourg-based investor. By the end of 2023, the total investment reached USD 5.5 million, enabling Koa to raise an additional USD 15 million in equity investments from long-term investors. These funds will support further expansion and operational scaling.

Investment and operating model

Koa’s financing was structured in multiple tranches, ensuring effective fund utilisation. The loan agreement required Koa to implement an environmental and social action plan (ESAP) to manage risks and establish impact targets. These measures aligned with international best practices to enhance the enterprise’s environmental and social governance.

As part of its financial strategy, Koa has maintained proactive engagement with investors, reinforcing trust through timely interest payments and transparent communication. The ability to generate additional equity investments indicates investor confidence in the business model’s scalability and long-term viability.

Impact measurement

Koa has developed an impact framework aligned with IRIS+, a recognised catalogue of performance metrics for impact investors. The framework includes targets for improving smallholder farmers’ livelihoods, sustainable production practices, and climate-positive cocoa production.

By the end of 2023, Koa had engaged 3,150 hectares of farmland under improved agricultural practices. The company aims to reach 10,000 farmers by 2026, ensuring increased income opportunities and the promotion of regenerative agriculture. Koa also tracks its total area under restoration and conservation efforts.

To address sustainability concerns, Koa employs GPS mapping and farmer education to mitigate deforestation risks. The company promotes sustainable farming practices, such as reducing chemical use, endorsing mechanical weeding, and integrating leguminous trees for soil fertility enhancement. These approaches support biodiversity and reduce environmental degradation.

Compliance with ESAP requirements ensures Koa aligns with governmental policies and international environmental standards. The enterprise follows the International Finance Corporation’s Performance Standard 6 to prevent habitat and biodiversity loss.

Scalability and replication

Koa’s success highlights how low-interest loans can address the financing gap for SMEs operating in high-risk agricultural sectors. The financing structure demonstrates that enterprises requiring USD 0.5 – 2 million, typically overlooked by commercial banks, can access capital through alternative investment mechanisms.

The model’s scalability extends beyond Ghana, with potential replication in other cocoa-producing regions. The willingness of farmers to supply unused cocoa pulp, combined with transparent, mobile-based payments, supports a replicable revenue model. This approach facilitates long-term financial sustainability while benefiting local communities, biodiversity, and climate resilience.

By aggregating multiple small-scale producers into a single funding vehicle, the investment strategy enables landscape-level impact. This model can serve as a blueprint for addressing financing challenges in sustainable agriculture globally.

Private investment

The financing strategy integrates multiple stakeholders, including private equity investors, development finance institutions, and sustainability-focused funds. The LRF and IDH Farmfit Fund provided the initial low-interest loan, which enabled Koa to attract additional private equity investments.

Repayment structures ensure financial sustainability, with returns generated through cocoa pulp product sales. Koa has demonstrated consistent repayment, reinforcing investor confidence and attracting further capital. This model underscores the viability of blended finance approaches in scaling sustainable enterprises.

Conclusion

The investment in Koa demonstrates how impact-driven financing can bridge capital gaps in sustainable agriculture. By repurposing agricultural by-products, the initiative enhances economic opportunities for smallholder farmers while promoting environmental resilience.

The structured financial model, coupled with robust impact measurement and compliance frameworks, ensures long-term sustainability. Koa’s expansion serves as a case study for leveraging innovative financing solutions to support sustainable livelihoods and conservation efforts within agricultural supply chains.