SABS Samoa AgriBusiness Support Project

SAMOA AGRITOURISM POLICY SETTING FORUM

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“Panel Forum: Regional perspective on opportunities/experiences to support Agritourism

development and investment”

Samoa Conference Centre, Apia Samoa 13th December 2016

Presented by: Ian M. Buck B.Ag.Sc.,Grad.Dip.Ag.Econ.,Dip.FS(FP).,FAICD.,FAIM.

Facility Manager

Samoa AgriBusiness Support Project

Supported by the Asian Development Bank and The Government of Samoa

Promoting Agribusiness & Economic Development

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The Samoa Agribusiness Support ProjectSABS

What is SABS?

• SABS is a pilot project – first of its specific type to be undertaken –Samoa first country to trial the concept;

• Established from an initiative of the Asian Development Bank and the Government of Samoa to stimulate agriculture’s role in economic growth and poverty reduction in Samoa.

• Rational - to revitalise agriculture & agribusiness to increase the sectors contribution to the economy & GDP through import replacement and export, which aligns with the Governments policy framework and the

Strategy for the Development of Samoa.

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Key Features• SABS is a 7 year Private Sector Development project designed to stimulate

development of the agribusiness sector in Samoa - Has a commercial focus;• Provides a combination of financial, technical and managerial support to

agribusiness enterprises;• Aims to reverse the decline of the agriculture and agribusiness industries,

increase exports, contribute to import substitution and create employment opportunities in rural areas through the provision of;

1. Financial Support to participating agribusinesses, via loans from the participating Commercial Banks in Samoa ; Access to cost effective interest rates and loan terms has been a major

barrier to agribusinesses;2. Business Support Services to participating agribusiness entities through

FM & PMU; Capacity building to improve weak links in the business operation or

improved access to markets etc• Incorporates a Gender Action Plan – to encourage increased participation of

women in business;• Incorporates M & E to measure outputs against objectives;

SABS

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• The key players:

Samoa Agribusiness Support Project

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SABS Project Management

FM & PMU

Commercial Agribusiness

Commercial Banks

• ADB provided a Grant to the Government of Samoa - MOF is the EA;

• Government of Samoa on-lent the Grant to Participating Financial Intermediaries (PFI or Banks) via Subsidiary Financing Agreement (SFA) between Government of Samoa and each PFI;

• Each PFI holds funds in a designated project account which are then proportionally allocated to Subloan A & Subloan B components;

Subloan A = Guaranteed Cash Collateral = Security – ALL approved partners;

Subloan B = Repayable Supplemental Seed Capital Loan = Top up Equity – SOME;

SABS Funding Arrangement

Financial Support Services;

• All prospective agribusiness project partners must meet SABS Eligibility Criteria – (Financial & Environmental) to qualify for support;

• FM works with partner agribusiness to develop business plan and prepares finance application for submission to bank;

• Bank provides the commercial loan - Projects must meet appropriate credit and other risk-related criteria as determined and applied by each commercial bank;

• Must use the finance for a “qualified project” in accordance with the conditions detailed in the loan agreement with each bank;

• Very Important: All initial discussions with partners held as “Strictly Private & Confidential” & as “Commercial in Confidence”; Trust & Confidence.

The SABS Support Services

Business Support Services;

• Is about capacity building - Identify the weak links in the business operation – Business Plan;

• Tailor the support to the business – Is not a “one size fits all”;

• Engage the appropriate specialists - Precise Terms of Reference for specific support required – Indefinite Delivery Contracts;

• Be prepared for the unexpected – “the known unknowns”

• When working in the commercial/private sector you need quick response times – “Time is money”!

• SABS role is to facilitate improvement in agri-business performance and meet target market product standards.

The SABS Support Services

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• Examples of business support services;– Strategic – Tailored Business Planning & Financial management;

– Marketing – Market access; labelling; may include joint venture arrangements;

– Agro-processing - Food technology; Industrial Chemist; Food Production Engineering services;

– Quality Control – Hygiene; Food Safety; Certification (Organic,HACCPS,ISO etc);

– Technology – Agriculture, Agribusiness, Business partnerships;

• Expenses shared by SABS project and agribusiness project partner on an 80:20 parallel cost sharing basis – Business Support Services Agreement.

• Agribusinesses also supported by a small Agribusiness Innovation Fund on a 75:25 parallel cost sharing basis;– Small short term expenditures relating to agribusiness expansion or operation

BSS (continued)

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» Project Design - 2012-14;

» Project Inception - September/October 2014;

» 2yr Project Implementation - end October 2014 – Process, Procedures & Presentations - build a prospect pipeline;

» Official Launch May 2015;

» May - November 2015 focus on Financial Support Services.

• 9 business plans and finance applications completed & submitted end yr 1.

• All approved; 7 drawn down, 2 on hold;

• Finance Terms 7 yrs & Interest rate 8.5 – 9%. At the time common agriloan rates (13.5 – 14.5% with 12 mth terms)

» 2016 - focus on provision of Business Support Services, including to date;

• Accounting and business management services;

• Organic certification; Industrial chemist; Food safety training & butchery training; Food production engineer; packaging design support.

Progress to date

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Thank You (Fa’afetai)

SABS Contact Details:

Facility Manager

Level 3 I Ministry of Finance

Central Bank Building I Apia I Samoa

E: ianb @sabs.ws

T: 685 34353 or M: 685 7749478

SABS Samoa AgriBusiness Support ProjectPromoting Agribusiness & Economic Development

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