In December 2014 the European Union (EU) has initiated the Enhanced Competitiveness of Tajik Agribusiness Project (ECTAP). The EU and the European Bank for Reconstruction and Development (EBRD) have launched EUR 47.6 million (~ USD 50 million) ECTAP to contribute to poverty reduction and economic growth through the enhancement of Tajik agri-food value-chains, agro-food enterprises and the quality and marketing of Tajik agricultural products.
Under ECTAP the EBRD will lend up to EUR 20 million to the Tajik agri business via on-lending funding via local commercial banks and microfinance institutions, as well as in bilateral loans to selected small and medium agri-companies. The EU will provide EUR 9 million in investment grants and a risk-sharing facility, with a further EUR 800,000 in technical assistance to support grant beneficiaries. The EU is further funding technical consultancy to the agricultural sector of EUR 5 million and the supply of laboratory equipment and consumables worth EUR 600,000 under ECTAP.
The project aims at enhancing the development of agricultural value chains in such Tajik agrisectors as dairy, fruits and vegetables by means of facilitation of access to new agricultural equipment and technologies and the access to finance, thus contributing to the poverty reduction in the country.
Potential clients of ECTAP - Tajik farmers and agribusinesses - will be provided technical and financial assistance on development of their businesses via technical support and business management training on one side, and the much-needed access to finance on the other. Technical assistance will also be available to those agribusinesses interested in modernised quality control and product certification according to the international standards.
The project significantly builds on the achievements of the Tajik Agricultural Finance Framework (TAFF) project. It was set up by the EBRD in 2007 (TAFF’s second phase was funded by the EU) and focused on increasing short term credit to agriculture, rebuilding value chains by fostering linkages between agro-businesses and farmers, and defining agriculture and agri-business development strategies. The project ended in 2013.
The ECTAP implementation was awarded to a consortium of two experienced international consultancy firms. The lead firm, Frankfurt School of Finance & Management gGmbH, can draw on its previous hands-on practical experience in the country gained through the implementation of the TAFF project in effectively carrying out ECTAP. The specialized partner, NIRAS Natura AB, will be specifically focusing on food quality/ safety, and marketing related issues. Together they ensure that the project objectives will be met.
ECTAP closely collaborates with stakeholders of selected Tajik food value chains, such as farmers and farmer groups, local Agricultural Extension Service (AES), Machinery Service Providers, agribusinesses, local private processing enterprises and processor), governmental and non-governmental organizations (and associations). Thus, the project aims to improve delivery of technical services to farmers in order to increase production of raw materials in adequate volume and quality. Furthermore, ECTAP develops the processing and marketing of high quality agricultural production and supports investments for agriculture and agribusiness technology by channeling grants through local Financial Institutions to enhance access to medium/long term credits needed by the cooperation stakeholders.