BENINDD - Due diligence assessment prior to the funding of a cashew nut processor in Benin

ARIA is an initiative which mandate is to facilitate the investment processes and increase the number of deals closed by DFIs in African countries. This study is linked to an investment project led by PROPARCO into a cashew processing operator in Benin

The assessment should support the investor in its Due Diligence approach by analyzing several aspects of the project (i) supply / procurement; (ii) technical feasibility and capacities of the promoter to respect the operational objectives and timeline; (iii) commercial strategy and (iv) cost structure / Business Plan review

SO1. Analyse the global cashew trade to capture the outlooks and perspectives (price trends)

SO2. Understand the Benin cashew value chain: place in the global cashew trade, competitiveness / risks, stakeholders, regulations and public policies, production basins

SO3. Get to know better the cashew players in Benin: consultation of promoter team and partners, but also buyers, suppliers’ representatives and other relevant interlocutor (potentially public institutions)

SO4. Assess the project promoter capacities and track record, through several calls, analysis of their project documentation, and especially visit of their existing operations

A1. Kick-off and available documents review : preliminary discussions with ARIA, PROPARCO and its partners, and other relevant stakeholders ; review of any relevant documentation provided and comparison with Nitidæ internal documentation and databases

A2. Trade and production data analysis at sub-regional and global levels : quantitative export data from international databases (UNCOMTRADE, FAOSTAT, EUROSTAT, Indian customs, Vietnamese customs, etc.)

A3. Field mission : meeting with the developer team, visiting existing processing facilities, meeting with other relevant stakeholders (farmers’ representatives, institutions), visiting the location of the project to assess its feasibility (labor availability, infrastructure)

A4. Business Plan and development scheme review : full review challenging the key assumptions (OPEX, CAPEX, ramp-up, working capital) and providing sensibility analysis with assumptions revised to evaluate the resilience of the project under different scenarios

A5. Recommendations and reporting : recommendations illustrated by a matrix of investment risk analysis including mitigation actions and a positive impact matrix