(Ecofin Agency) - CHO Group, a Tunisian-based producer and exporter of organic and natural olive oil will receive up to €22 million in financing from the International Finance Corporation (IFC). The financing package will be used by CHO as working capital and for investment in new equipment.
The US-based development finance institution will not just be providing the funds but will also be providing advisory services to small-holder olive farmers in CHO's supply chain to help them improve productivity.
"Supporting a company like CHO and the thousands of farmers who rely on it for their livelihoods will help create jobs and rekindle economic growth as Tunisia recovers from COVID-19," said Georges Joseph Ghorra, IFC's Resident Representative in Tunisia. "IFC's long-term financing, with an eight-year tenure, is a strong testament to our additionality in the Tunisian market as a countercyclical development partner," he added.
According to Tunisian Agriculture Ministry, olive oil constitutes half the country’s agricultural exports. The country's primary export markets for olive oil are Europe and the United States, with 8% sold in bottles in 2019/2020. However, the market faces challenges in marketing and declining prices in international markets.
Tunisia’s olive oil exports experienced substantial growth in 2020 (350 thousand tons), increasing significantly compared to the previous year which yielded 140 thousand tons. With this production capacity, Tunisian olive oil remains unfamiliar to many foreign consumers. According to Chokri Bayoudh, director-general of the Tunisian National Oil Officer, this unawareness is partly because the country exports its products largely in bulk, mostly to Italy and Spain.
In this vein, policies have been put in place to increase the annual average production of olive oil from 180,000 MT to 250,000 MT by 2025 and aim to export 50 thousand tons of packaged olive oil by 2025. This will be achieved via an aging olive tree renewal plan, representing 20 percent of olive trees, as well as plans for new plantations in northwest Tunisia.