09/07/2024

DFCD supports deforestation-free coffee practices in Vietnam

Vietnam's coffee-producing regions are highly vulnerable to climate change, with smallholder farmers particularly unprepared for its consequences. Phuc Sinh Corporation, a leading promoter and trader of Rainforest Alliance (RA) standard coffee, is dedicated to extending the benefits of RA practices to as many farmers as possible. Their goal is to expand RA-certified coffee cultivation from around 3,620 hectares in 2023 to nearly double that by 2028.

Through the DFCD Origination Facility, SNV intends to support this ambitious initiative.

To facilitate this initiative, the Dutch Fund for Climate and Development (DFCD) Origination Facility’s investment committee has approved an origination project proposal. This proposal will assist Phuc Sinh in preparing an investment plan to scale its deforestation-free coffee business by extending RA-certified practices to a broader base of farmers.

This investment plan will enable Phuc Sinh to help farmers adopt sustainable and climate-smart farming practices required by the RA standard, that will enhance their coffee farming to become more resilient to the impacts caused by climate change. Key components include expanding three coffee factories in major Robusta-growing areas and establishing an Arabica processing factory. These efforts aim to de-risk planned investments in deforestation-free coffee in climate-vulnerable regions.

To enable the final development of this investment proposal, SNV plans to sign a EUR 367,500 grant funding agreement with Phuc Sinh. Additionally, SNV will provide a comprehensive technical assistance package.

Outcomes of the Origination project:

Evaluating expansion opportunities: Identifying and assessing areas suitable for expanding RA standard coffee cultivation.

Empowering farmer training: Enhancing Phuc Sinh’s capabilities to scale up comprehensive training programs for farmers on RA standards.

Establishing new operations: Supporting the initial setup of Phuc Sinh’s operations in new sourcing regions to ensure smooth and efficient integration.

Advancing environmental and social responsibility: Improving the company’s Environmental and Social Management System (ESMS) and implementing a robust Environmental and Social Management Plan (ESMP).


Expected outcomes of the investment proposal:

Reducing carbon emissions: Avoiding 3,825 tonnes of CO2e greenhouse gas emissions annually.

Sustainable farmland management: Managing 3,300 hectares of farmland sustainably, enhancing resilience to climate change.

Community impact: Benefiting 10,000 individuals, including 3,761 from vulnerable groups.

Empowering communities: Empowering 2,946 individuals with increased decision-making power.

Supporting biodiversity: Actively supporting and promoting biodiversity in all operational areas.

‘Businesses like Phuc Sinh can serve as role models for climate adaptation. There's a financing gap between business needs and available funding for scaling. The Origination Facility can bridge this gap, helping to de-risk and access necessary financing. We look forward to supporting Phuc Sinh in preparing for potential financing.’ – Alex Downs, Business and Investment Expert, SNV-DFCD.

‘With SNV-DFCD’s support, we aspire to become a leading company in certified deforestation-free coffee. Our goal is to scale our business sustainably, addressing climate adaptation challenges while considering the needs of vulnerable local communities.’ – Mr Tran Cong Vinh, Phuc Sinh.

About the DFCD

The Dutch Fund for Climate and Development (DFCD) is a climate resilience fund, dedicated to supporting climate adaptation and mitigation projects which benefit vulnerable communities and landscapes. It is funded by the Dutch government and managed by a pioneering consortium of Climate Fund Managers (CFM), Worldwide Fund for Nature Netherlands (WWF-NL) and SNV, led by the Dutch Entrepreneurial Development Bank, FMO. For more information, please visit the DFCD website.


About SNV

SNV is a global development partner deeply rooted in the African and Asian countries where we operate.

With 60 years of experience and a team of approximately 1,600 people, we strengthen capacities and catalyse partnerships that transform agri-food, energy and water systems. Working on the core themes of gender equality and social inclusion, climate adaptation and mitigation, and strong institutions and effective governance, we tailor our approaches to different contexts to achieve large-scale impact and create sustainable and more equitable lives for all.


About Phuc Sinh

Established in 2001, Phuc Sinh Corporation has evolved from a trader of coffee and pepper to a leading processor, and now, an increasingly diversified and integrated coffee and pepper company. Serving both B2B and B2C customers in international and domestic markets, Phuc Sinh has been processing coffee since 2009. Notably, they expanded their operations with the opening of an Arabica processing plant in Son La in 2017, reinforcing their commitment to quality and innovation in the industry.

You can read the full disclosure document here.

For more information and if you want to share any confidential information you may have regarding the intended project or company, please contact: SNV - Dutch Fund for Climate and Development dfcd@snv.org