Sub-Committee on Cotton - How to prepare a bankable project proposal for cotton value chain development - Report by the Secretariat


How to prepare a bankable project proposal
for cotton value chain DEVELOPMENT

REPORT BY THE SECRETARIAT[1]

TABLE OF CONTENTS

acronyms. 5

acknowledgments. 6

disclaimer. 7

foreword. 8

Head of the WTO Cotton Section. 8

AFREXIMBANK - Director of Export Development 9

UNIDO Chief of Division of innovative Finance and International Financial Institutions. 10

executive summary. 11

1   introduction.. 13

2   Presentation on how to make a project bankable and eligible for Afreximbank financing. 13

This section was presented by Mr Nafal Hassani-Mohamed, Manager in Project Preparation of Afreximbank. 13

2.1   Definition of "bankability" and aspects to consider. 14

2.2   Conditions of access to the Afreximbank Project Preparation Facility (APPF) 15

2.3   Eligibility of projects for Afreximbank financing. 16

2.4   Importance of risk mitigation. 16

2.5   Some landmark projects of Afreximbank. 17

2.6   Conclusion. 17

3   overview of mechanisms for cotton value chain development at afreximbank. 18

This section was presented by Mr. Abah Ofon, Senior Manager, Export Development Advisory, Afreximbank. 18

3.1   Presentation of Afreximbank's export development department 18

3.2   Priority sectors of intervention. 19

3.3   Initiatives and products through which Afreximbank intervenes in the development of the value chain. 19

3.4   Conclusion. 21

4   Case study of a project that has crossed Afreximbank's bankability threshold. 21

This presentation was also delivered by Mr. Abah Ofon, Senior Manager at Afreximbank's
Export Development Advisory. 21

4.1   Components of the test successfully passed by the project 21

4.2   Conclusion. 22

5   presentation of potential cotton projects in west and
central Africa. 22

This section was presented by Laurent Aucouturier, Partner at Gherzi Textil Organisation AG. 22

5.1   Five mega trends of the global textile and clothing industry. 22

5.2   Current mapping of the characteristics of the textile value chain in West and
Central Africa. 23

5.3   Proposals for potential projects in the cotton textile sector 23

5.4   On the opportunities of the cotton sector in West and Central Africa and how to
exploit them: a proposal for five areas of intervention. 24

5.5   Conclusion. 25

6   Benin and Côte d'Ivoire as case studies in the presentation of a
swot analysis on cotton value chain development in C4+ countries. 26

This section was presented by Mr. Maxime Zounon, Head of business in the textile industry
and National Consultant for UNIDO. 26

6.1   Statistical data on the methodology applied for the baseline study. 26

6.2   Profile of Benin. 26

6.3   Profile of Côte d'Ivoire. 27

6.4   Conclusion. 28

7   proposed actions and suggestions to make as many projects as
possible bankable in the cotton sector and concrete indication of
the way forward for the involvement of stakeholders such as
Afreximbank and other partners in the issue of cotton value chain dvelopment in Africa. 28

7.1   Question-and-answer session. 28

Question 1: What risk analysis tools does Afreximbank use?. 28

Question 2: Where are Afreximbank's offices in West Africa?. 28

Question 3: Regarding raw materials, does Afreximbank get involved in the earlier stage of
 the project to ensure that there's a proper amount and quality of raw materials? Are
 sustainable production practices in cotton relevant to Afreximbank?. 29

Question 4: Are security concerns an obstacle to accessing to the APPF? Given that in
West Africa, there are currently several security-related challenges, is that an obstacle
from Afreximbank's perspective?. 29

Question 5: Has the project that was presented at the webinar and that interests
Afreximbank in Burkina Faso met the criteria of Afreximbank, and is it already implemented
or is it a future project?. 29

Question 6: Your focus seems to be on risk. However, could you talk about the opportunities
you are looking for? What are your requirements for impact achievement? Do you only
have a financial objective, or do you as well set environmental and social guarantees?. 29

Question 7: Could you give us more information about the business plan, the annual amounts
for business plans? What is the acceptance rate or the rejection rate for the business plans
that are presented to Afreximbank?. 30

Question 8: Does Afreximbank intervene and finance feasibility studies?. 30

Question 9: Does Afreximbank have examples of direct financial support for private
operators in PPP projects or projects with the State? Are there any private projects that you provide funding to?. 30

Question 10: What is the interest rate applied by Afreximbank?. 31

Question 11: Does Afreximbank assist MSMEs, or does it only deal with larger enterprises?. 31

Question 12: Does Afreximbank get involved at the stage of primary processing for
cottonseed?. 31

Question 13: Are Afreximbank's funding mechanisms open to the whole population or just
to certain people?. 31

Question 14: This question is about supporting companies that are encountering difficulties.
It might be a good company going through a difficult patch financially at the moment. Is that
an area where help is available from Afreximbank? Is funding for restructuring an option?. 31

Question 15: How can the Bank capitalize on the experts that are currently being trained?. 32

Question 16: What does Afreximbank's country assessment look for in terms of cotton?
This has been a difficult sector for a lot of African countries. What can Afreximbank do to
support them in overcoming those challenges?. 32

Question 17: Is there a possibility to make the PowerPoints and slides that were shared
today available to participants?. 32

Question 18: What is Afreximbank doing to support feedstock staying on the continent so that it can go into processing and ultimately consumption on the continent?. 32

8   Afreximbank proposal for a collaborative action, together,
with C4+ countries, to identify projects eligible for Afreximbank financing. 32

9   Conclusion.. 33

9.1   Outlook for the future. 33

10   Closing speeches. 34

10.1   AFREXIMBANK. 34

10.2   UNIDO. 34

10.3   WTO. 35


[1] This document has been prepared under the Secretariat's own responsibility and is without prejudice to the positions of Members or to their rights and obligations under the WTO. It has been prepared for information only and is not intended to provide any authoritative or official legal interpretation of the provisions of the WTO Agreements in general on in relation to any measure listed in this document.