<h1 style="text-align:center;">UHNW Millennials and Impact Investing</h1>The impact investing movement is gaining popularity across generations, and none more so than with millennials (individuals who were born in the early 1980s to 1995). Impact investing combines the best attributes of philanthropy and traditional investing. It operates under the philosophy of “doing well, by doing good”, wherein investors seek a double bottom line - financials returns and positive social impact.&nbsp;Impact investing covers a broad spectrum of financial offerings, from Environmental, Social and Governance (ESG) screened securities, to donor-advised-funds, to angel investing. While the current impact investing market is growing - with more than one out of every six dollars under professional management in the U.S. invested according to sustainable, responsible and impact investing strategies - this number is expected to exponentially increase in the near future.*We are on the verge of history’s largest transfer of wealth between generations. According to Boston College’s Center on Wealth and Philanthropy, an estimated $59 trillion will be transferred generationally in the U.S. between 2007 and 2061.** As younger generations take control of this wealth, impact investing will continue to grow in prominence, as suggested by the recent publication of several millennial-focused financial studies and reports.Proving Worth, one such study conducted by OppenheimerFunds, focused on answering several core questions concerning the world's (soon-to-be) wealthiest generation: 1) what ultra-high net worth (UHNW) millennials value most, 2) how wealthy millennials influence family decisions, and 3) what UHNW millennials want from a financial advisor.WHAT UHNW MILLENNIALS VALUE MOSTMillennials are dreamers and doers - they not only seek to make the world a better place, but also pursue activities that positively impact the world around them, be it philanthropy or value-based investments. It should come as no surprise then that “ninety-six percent of UHNW millennials who participated in the [OppenheimerFunds] study were interested, or very interested, in philanthropy. A respective 70% and 64% were interested, or very interested, in socially responsible investing (SRI) and impact investing.”***So, what do millennials value most when evaluating the impact of their philanthropic or investing efforts? According to Proving Worth, rather than focusing on the “feel good” factors, millennials are instead results-driven and look to the long-term. “When assessing different approaches, 96% of participants identified long-term returns as important/very important, while a respective 95% and 91% ranked accountability and sustainability as important/very important.”***As for millennials’ preferred areas of interest for impact investing, it comes down to basic human rights: education, gender equality, economic justice, water and the environment. Now, in terms of deciding which of the aforementioned areas to pursue, it seems that family and parents still have a considerable influence.<figure class="image image_resized" style="width:99.22%;"><img src="/uploads/millennial_blog_7bc91fb94c.jpg"><figcaption>Millennials from the Impact Angel Network</figcaption></figure>MILLENNIALS &amp; THEIR FAMILIESMillennials, both from the Proving Worth study and RENEW’s own Impact Angel Network, have noted the influence of parents and grandparents in shaping their viewpoints on the importance of preserving wealth and creating a positive legacy. Impact investing has therefore become a natural segue from the traditional charity of older generations, by combining the family values instilled in millennials at a young age with what they in turn value most - results and sustainability.That being said, millennials are not yet making the key decisions regarding their family’s wealth and investment strategies. While 59% are a committee or board member for their family’s wealth management, “only 18% of the study’s respondents make strategic decisions for their family’s overall wealth management.”*** The reason? Millennials lead extremely active lives that are typically centered on their careers. They are more likely to pursue their own interests before becoming heavily involved the family finances. It won’t be long though until millennials are running the portfolios of today, wherein we will see a dramatic shift towards impact investing.MILLENNIALS &amp; THEIR ADVISORSMillennials are some of the world’s most technologically driven individuals. So, when looking for sources of information on impact investing, many would naturally assume they would turn to social media or the Internet. Instead, topping the list of the most trusted sources of information are family, research, professional colleagues, business contacts, and advisors. According to the Proving Worth study UHNW millennials view advisors as “a source of knowledge and advice”, especially when a personal relationship has been established and the advisor demonstrates an understanding of their family and wealth goals.***The flip side to this coin is that the study also revealed “there is a considerable disconnect between the services millennials want from their advisors and the offerings that are currently available.”*** Millennials are looking for advisors who focus on wealth transfer and deal generation. They are not interested in cookie cutter financial solutions. Rather, as expressed by several participants in the study, millennials seek customized and high-touch financial solutions, a framework within which they can test out their ideas, and a partner that helps educate and develop said frameworks. Financial advisors and wealth management firms of today will need to quickly evolve in order to retain the assets of families that will soon be run by this next generation.RENEW recommends millennials work with their families and with their wealth managers to create an impact investment plan that all generations are part of building. Follow this <a href="../2014/part-3-impact-investing-transferring-wealth-wisdom-and-values-between-generations.html">LINK</a> for guided steps on how to get the process started.<hr><a href="http://www.ussif.org/sribasics">*U.S. SIF: SRI Basics</a> <a href="http://blogs.barrons.com/penta/2016/01/15/a-rising-tide-of-impact-investing/">**Barron's: A Rising Tide of Impact Investing</a>. <a href="https://www.oppenheimerfunds.com/private-banks/doc/Proving_Worth_The_Values_of_Affluent_Millennials_in_North_America.pdf?dig_asset_metrics=done">***OppenheimerFunds: Proving Worth: The Values of Affluent Millennials in North America</a>.

Expansive OppenheimerFunds study reveals what matters most to millennial investors.

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UHNW Millennials and Impact Investing

<h1 style="text-align:center;">We Used to Give to Africa?</h1>Recently, RENEW’s own Matt Davis sat down with <a href="http://www.forbes.com/sites/devinthorpe/2016/01/13/impact-investor-in-ethiopia-fills-financing-gap/#6836aaf850b3">Forbes contributor Devin Thorpe</a> to discuss how RENEW and the Impact Angel Network (IAN), one of the largest U.S.-based angel networks for Africa, are “filing the financing gap” in East Africa. The following is a summary of some of the topics covered during Matt and Devin's live chat, so be sure to watch the entire interview below.Since 2012, the IAN has invested in seven small to medium-sized enterprises (SMEs) in East Africa, making it one of the largest investors in Ethiopia on a deal volume basis. In doing so, RENEW and the IAN are not only addressing a development challenge, but a market challenge as well.Considered too large for micro-financial institutions, and too small for larger venture capital firms, SMEs make up what is commonly known as the “missing middle” of emerging economies. Investing in SMEs addresses the serious financial constraints these types of companies face in developing countries. It also addresses a market challenge commonly experienced by private equity firms - sourcing a pipeline of quality companies. By mentoring and shaping the SMEs of today into the market leaders of tomorrow, RENEW is able to provide larger venture capital firms with a steady stream of companies that are run by ethical and vigilant leaders.So, what is the ultimate goal of RENEW and the IAN’s work in Ethiopia? That one day our grandchildren will look back and ask us in bewilderment, "we used to GIVE to Africa?”<figure class="media"><oembed url="https://youtu.be/4olNft2kudM"></oembed></figure>

RENEW’s Matt Davis sits down with Forbes contributor Devin Thorpe to discuss filling the financing gap in Ethiopia.

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We Used to Give to Africa?

<h1 style="text-align:center;">Accelerating Business Growth Project</h1>As many of you know, RENEW operates under an innovative public-private partnership that allows us to do smaller investments than traditional private equity investors on the continent of Africa. This model helps bridge the financing gap and addresses the economic "missing middle" that stalls economic growth in most frontier markets. Under this type of partnership, the development community covers some of RENEW's operating expenses so RENEW can provide members of the IAN high-quality investment management services without charging exorbitant fees relative to the size of the investments being considered. Starting in 2013, RENEW began testing this business model with the U.S. Government, which resulted in seven investments and 1,100 jobs supported by the IAN's portfolio. But, that was just the start - investments take years to develop and nurture. So, thanks to the Canadian Government through Global Affairs Canada (GAC), RENEW will be able to scale up our support for the IAN and continue providing high-quality investment services in Ethiopia for the next five years under the Accelerating Business Growth (ABG) program.The goal if this partnership is to ultimately increase awareness and understanding of private equity investing in Ethiopia, increase the number of investments being made in Ethiopian SMEs by addressing the current financing gap, and create sustainable job growth.THE EXCHANGE:RENEW is pleased to officially announce the launch of a vital investment and business acceleration project. The project, formally called Accelerating Business Growth (ABG), is made possible through the public-private partnership between RENEW and Global Affairs Canada (GAC). ABG includes a number of strategic components including a national Investment Challenge, Finance Incubators and The Angel Investment Exchange (also referred to as “The Exchange”). The Exchange will be the focal point of the project and the goal of the Investment Challenge. The Exchange will bring high potential companies, called small and medium enterprises (SMEs), through an intensive executive management-training program and help them connect with international investors and markets. The goal is for businesses to scale into market leaders enabling them to play a stronger role in the Ethiopian economy.<figure class="image"><img src="/uploads/training_26f9c8d0ca.jpg"></figure>The Exchange aims to support 50 companies, which will be selected during the Investment Challenge, over the course of the next 5 years. The Exchange will focus on building financial management, environmental social and governance best practices, legal, operations and marketing strategies. “Most companies in Ethiopia, even large companies, agree that they would benefit from additional management disciplines and training to compete in the international market. After years of working with companies in Ethiopia and making our share of mistakes, we’ve found some of the secrets to success for companies. The Exchange will be the place where we work with companies to understand these secrets. For those willing to do the hard work, success is almost guaranteed,” says Matthew Davis, partner at RENEW. These “secrets” will help companies transform into market leaders and ultimately lead to sustainable job creation for low-skilled workers, including women and young adults, through a dynamic and growing small and medium business sector in Ethiopia.WHY RENEW:RENEW is an experienced facilitator of an innovative investment model that brings the development community, the host government, foreign investors, and local companies together around a shared common interest: to grow the private sector in African economies while creating lasting change for its communities through job creation and positive social impact. RENEW’s public-private partnership model lowers the transaction costs, which normally prevent foreign investors from investing in SMEs located in frontier markets. RENEW organizes and supports medium-sized investments made by the Impact Angel Network (IAN), the largest North American-based impact angel network for Africa. RENEW acts as the IAN’s in-country support team and provides consulting and investment services that span across all aspects of the investment process. RENEW’s model seeks to reduce the costs and risks foreign investors experience when investing in developing countries, and to increase the local awareness and strength of the business community in an effort to attract larger equity investments for its companies.<figure class="image"><img src="/uploads/canadian_crew_5ac4b431f7.jpg"><figcaption>Photographed: Ambassador Philip Baker, Parliament Secretary Karina Gould, members of their team, as well as members of the Mama Fresh and RENEW teams.</figcaption></figure>BLENDED FINANCE:A growing school of thought proposes that SMEs in developing countries are key drivers of long-term stability and growth. By providing jobs, paying taxes, and producing, buying and selling local goods and services, SMEs act as the backbone or engine of an economy. Unfortunately, SMEs struggle to grow in many developing countries, and as a result, microbusinesses and large conglomerates dominate the country’s economic pyramid. While the excitement for SMEs is there, both from public and private sector actors, many aid-centric projects are underperforming and few investments are being made into SMEs in developing countries by private investors - leading to a financing gap or what is commonly referred to as a “missing middle”. RENEW is pioneering an innovative public-private partnership model that stimulates direct investments into promising SMEs. RENEW recently partnered with the Canadian Government to implement a novel approach that leverages the private sector to create sustainable economic development.The public-private partnership model (where the interests of the development community so clearly align with the local private sector and the investment community) represents a new field of development that is rapidly growing. The type of financing RENEW and GAC are helping mobilize – broadly called <a href="https://renewcapital.com/blog/2016/blended-finance">blended finance</a> – offers investors the opportunity to create sustainable social impact and financial returns through investments in companies that operate in high impact and fast growing countries, such as Ethiopia. These trends, along with Ethiopia's rapidly expanding private sector, could help position ABG to be a flagship project in the development sector.Our investment strategy closely aligns with the goal and targets in the Ethiopian Government’s Growth and Transformation Plan II and the government's overall desire to help Ethiopia industrialize and become a middle-income country by 2025.

RENEW to work with Global Affairs Canada in Ethiopia under new public-private partnership.

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Accelerating Business Growth Project

<h1 style="text-align:center;">RENEW Celebrates Four Years of Investing in Ethiopia</h1>This February, RENEW celebrates four years of investing in Ethiopia! While this number may seem small, the company that you see before you today is actually 10 years in the making. Matt Davis, RENEW’s CEO and one of the founding members of the Impact Angel Network, stepped onto the continent of Africa in 2005 and set in motion the gears that would eventually turn an idea of impact investing into reality.From 2006 to 2008, Matt took several trips to Uganda, where he saw incredible business opportunities overlooked by Westerners who were instead focusing on the region’s problems. Returning to the States, Matt brought together a team of individuals who began to formulate a new kind of investment model that could help U.S. investors become more involved in Africa’s growing private sector. RENEW LLC was established in 2007 and over the next several years, Matt and Laura Davis (who joined the team in 2008) continued to refine RENEW’s business model and strengthen our sourcing, due diligence, structuring, closing and investment management processes.<figure class="image image_resized" style="width:98.07%;"><img src="/uploads/4th_anniversary_d20e444f30.jpg"></figure>In 2011, RENEW launched its first public private partnership (PPP) model with the U.S. government in Afghanistan. RENEW then headed back to East Africa in February 2012, opened our Addis Ababa office. Seven investments later, RENEW is now the largest private equity investor in the country on a deal-volume basis.Quite a bit has changed since RENEW first opened its doors in Ethiopia. To talk about the progress that both RENEW and the country have experienced since 2012, I connected with Matt and Laura and asked them to share their candid thoughts:Out of the many countries that make up the continent of Africa, why did you decide to open up the office in Addis Ababa, Ethiopia? Initially, it was overlooked. But back in 2012, it had excellent fundamentals and was poised for growth. In fact, Ethiopia is now considered to be one of the top ten fastest-growing economies in the world.Over the last four years, how has the investment environment of the country changed? In step with the impressive change that we see out our office window every day, the government has made strides to improve the investment environment. While private equity still is confused with more familiar forms of foreign investing, such as joint ventures and greenfield, the various government agencies, local banks and entrepreneurs are learning the benefits of private equity and how it can help drive the growth of their country.What makes RENEW unique from other impact investing firms? RENEW is very similar to a traditional venture capital firm, in the sense that we do many of the same activities (sourcing, vetting, due diligence, etc.), but we have this other unique component to our model - the Impact Angel Network (IAN). Having the IAN gives us a huge competitive edge over other investment models. While we may lose the advantage of having a ready available pool of capital to draw from, we do have: 1) time, 2) flexibility, and 3) the wisdom of our investors. Time, because our capital deployment is not constrained by a set period, rather we can take our time, which is required to be a successful and patient investor in the region. Flexibility, because we can do smaller deals and we are not locked into rigid investment parameters. And most importantly, we are able to leverage the collective wisdom of the network. We currently have more than 70 bank executives, business men and women, and entrepreneurs who help us select the best investments for the network.How has RENEW grown as a company? Every year our team becomes sharper. We are committed to the continent – RENEW will be here 30 years from now. Every day our team grows smarter. We are not immune to mistakes, but we see them as the best type of learning opportunity that we can have, because investing in this part of the world is largely uncharted territory.What have been the company’s largest challenges so far and how has RENEW faced them? Learning what it means to be a successful business in a country like Ethiopia is, in some aspects, the same as it would be anywhere else. But, there is a good 30% that takes a unique skill-set and mindset that cannot be learned quickly. It took us a while to understand how valuable that 30% is, and how our understanding of the current economic and business environment of the country is always adapting and evolving.In your own words, what are RENEW and the IAN trying to achieve at the local, national and international levels? It's simple: find, invest in and grow amazing companies, and in the process, make a good return and a positive impact in the country.Over the last several years, has RENEW seen any noteworthy trends in the fields of angel and impact investing? Angel investing has definitely become popularized with shows like Shark Tank. Impact investing is clearly on a major growth trend. In fact, we are on the verge of history’s largest transfer of wealth between generations. Recent studies have indicated that an estimated $59 trillion will be transferred between generations in the U.S. over the coming decades. As younger generations and millennials take control of this wealth, we believe impact investing will continue to grow in prominence.Where do you see RENEW and the IAN going in the next five to 10 years? 500 members, five countries and 50 investments in five years. You can do the math for 10 years!

Matt and Laura Davis discuss the changes that RENEW and Ethiopia have experienced since 2012.

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RENEW Celebrates Four Years of Investing in Ethiopia

<h1 style="text-align:center;">Tebita’s Contribution to Humanity</h1>One of our favorite things to do at RENEW is to share the accomplishments achieved by our portfolio companies with our members and the greater impact investing community. While there are several that come to mind across the portfolio, this blog will take a closer look at East Africa Emergency Services LTD (EAES) and their most noteworthy client, Tebita Ambulance and Pre-Hospital Emergency Service PLC (Tebita), the first and only private ambulance service in Ethiopia.Members of RENEW's global Impact Angel Network (IAN) closed an investment in EAES in May 2015. EAES serves providers of emergency medical services and training in East Africa, Ethiopia in particular, in order to ensure that international and domestic clients have access to reliable, high-quality emergency care. EAES works in partnership with local firms such as Tebita by offering business development, procurement and administrative support. The investment seeks to help medical service companies operate more efficiently and to free them up to focus on their core functions, primarily caring for patients in crisis. In meeting this need, EAES and Tebita, together, aim to improve access to quality emergency services for thousands across East Africa. And they have been doing just that.<figure class="image"><img src="/uploads/eaestebita_blog_e8ef63b97b.jpg"></figure>Looking back at 2016, the Tebita/EAES partnership has produced positive social impact in Ethiopia by not only providing critical emergency services and ultimately saving lives, but also by educating the local and global communities on the ability individuals can have, be they bystander, emergency responder or angel investor, in changing the course of emergency care in Ethiopia. Here are just a few examples:<ol><li>To date, Tebita has a fleet of eleven ambulances, has provided ambulance services to more than 40,000 clients and emergency training to more than 25,000 trainees. “Tebita” is Amharic for “drop,” a message to force every citizen to think about his or her drop of contribution to humanity. And there is no one who believes in this idea more than Tebita’s CEO and founder, Kibret Abebe Tuffa.</li><li>In June 2016, Kibret attended Europe’s leading forum on international development - European Development Days. As a panelist, Kibret spoke on Tebita’s fight to save lives, as well as the role that social enterprises can have in furthering development goals. “Without responsible private sector involvement, tackling social problems is like clapping with one hand.”</li><li>In October 2016, Ethiopia’s Minister of Health, Dr. Kesete Brehane Admasu, honored EAES and Tebita with the “Extraordinary Award For Dedication and Exceptional Contribution On Health And Social Service in Ethiopia” at their annual conference, and named Kibret an Ambassador of Health and Social Service. Tebita is the only private sector company to be recognized with this award.</li></ol><figure class="image"><img src="/uploads/eaestebita_blog2_25922f3a89.jpg"></figure>RENEW and the IAN are proud to be part of EAES and Tebita’s amazing and impactful story, and we hope that everyone finds inspiration in the actions Kibret takes every single day to positively change and save lives of so many.

Celebrating how one company has saved and positively changed the lives of so many.


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Tebita’s Contribution to Humanity

<h1 style="text-align:center;">The Angel Investment Exchange</h1>Thursday evening brought a stellar crowd to RENEW's new office on the second floor of Galani Cafe in Jacros, where we officially launched RENEW's Angel Investment Exchange (also referred to as “The Exchange”), and kicked off the Accelerating Business Growth project that is undertaken with financial support of the Government of Canada, provided through Global Affairs Canada. Thanks to everyone who came out to celebrate the launch, and to the Embassy of Canada in Ethiopia for co-sponsoring the event.The Exchange, the focal point of the five-year ABG project, will bring local SMEs through an intensive executive management-training program and help them connect with international investors and markets. The goal is for businesses to scale into market leaders, enabling them to play a stronger role in the Ethiopian economy and create sustainable job growth.<figure class="image"><img src="/uploads/gac_abg_launch_party1_6b46781e00.jpg"></figure>Whether you were able to attend the event to learn more about the project or not, we wanted to follow up with information about what's next...City Partners: We are currently signing memorandums of understanding with City Partners in Addis Ababa and Hawassa. Other cities in Ethiopia will be coming soon. If you are interested in being a City Partner to learn about private equity and in turn help companies become investment ready, please contact Bethlehem Bogale at <a href="mailto:bbogale@renewcapital.com">bbogale@renewcapital.com</a>Businesses: Want to learn more about our Investment Challenge? Plan to attend our Investment Challenge meeting on Thursday, December 8, 2016 at The Exchange. RSVP to Bethlehem Bogale at <a href="mailto:bbogale@renewcapital.com">bbogale@renewcapital.com</a>.CFO 100: Are you a senior accountant with your company? Interested in expanding and growing your business acumen and financial skills? Stay tuned for more information regarding how you can participate in CFO 100.Investment Pitch: In February 2017, a select group of businesses will showcase their investment plan to members of the Impact Angel Network who will be visiting Addis Ababa. Interested in presenting? Be sure to attend an Investment Challenge meeting beforehand.We look forward to working with you to accelerate business growth in Ethiopia!

The Accelerating Business Growth (ABG) program began on May 30, 2016, and ends on May 31, 2021. ABG aims to increase employment and income generation opportunities for men, women and young adults in Ethiopia. The project addresses the gap in the capital markets in Ethiopia and many countries in Africa, called the “missing middle”, which limits the ability of women- and men-owned SMEs to access finance to grow their businesses and create sustainable jobs. The ultimate outcome of the ABG program is to attract CAD $52.5M of capital in debt, equity and grant financing to scale businesses and support or create 5,000 jobs for low-skilled workers, of which 3,000 are expected to be held by women.


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Accelerating Business Growth

A toast to the official launch of the ABG Project!

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The Angel Investment Exchange

<h1 style="text-align:center;">Back to the Source: Coffee</h1>&nbsp;AN INTRODUCTION TO KAFFAKaffa, Ethiopia, from which the term “coffee” is derived, is the birthplace of coffee, according to many experts including <a href="http://www.ncausa.org/About-Coffee/History-of-Coffee">The National Coffee Association</a>. To this day, the Kaffa region in the southwestern part of Ethiopia remains one of the strongest coffee-producing regions in the country.The legend goes that Kaldi, an Ethiopian goat herder, first discovered coffee after he noticed his goats became energetic upon eating cherries from a certain tree. Kaldi shared this knowledge with the monks of a local monastery, who made a drink with the berries and enjoyed its invigorating properties. Soon, the findings of coffee spread from Ethiopia to the Arabian Peninsula and then on to Europe. The earliest credible evidence of either coffee drinking or knowledge of the coffee tree appears in the middle of the 15th century, in the Sufi monasteries of Yemen.(1) By the 16th century, coffee had reached the rest of the Middle East, Persia, Turkey and Northern Africa before spreading to Europe, Indonesia, and finally to the Americas.<figure class="image"><img src="/uploads/dsc_0854_4341a7fdef.jpg"></figure>As it has been since the 16th century, Ethiopia remains one of the largest producers of Arabica coffee beans in the world. RENEW and the Impact Angel Network (IAN) are proud to be a part of this important tradition through our investment in METAD Agricultural Development PLC (METAD), an Ethiopian specialty coffee company founded in 2012 by Aman Adinew. With a vision for crop-to-cup coffee, METAD aims to not only strengthen Ethiopia’s coffee reputation amongst sophisticated consumers in the international market, but also help local farmers improve the quality and value of their harvested crop. In pursuit of this vision, METAD seeks to become the leading specialty coffee brand by offering global and domestic consumers with the highest quality, 100% Ethiopian Arabica coffee.METAD’s coffee cultivation, harvesting and primary processing occurs at farm sites 75 kilometers beyond Yirgacheffe, deep in the heart of some of Ethiopia’s best coffee country. METAD’s 200-hectare Hambela and Gedeb farm and processing sites include washing stations, a dry mill, a huller, beds for sun drying, and warehouses for storage to handle all of the pre- and post-harvesting coffee activities.<figure class="image"><img src="/uploads/view_of_hambela_processing_site_0_5b205d80d6.jpg"></figure>COFFEE CULTIVATIONAs a whole, coffee's production process and value chain are very complex, much like viticulture. The two main species of coffee grown for coffee production today are Arabica and Robusta, with Arabica coffee being indigenous to the mountains of the southwestern highlands of Ethiopia.The Ethiopian coffee value chain starts with farms, like METAD, that grow and harvest red cherries - the coffee fruit and seed (see photo below). Farms either sell the harvested cherries to independent processors or process the crop themselves. A processor has two options: 1) select the highest quality red cherries and dry them on raised drying beds (what is called sun-dried, unwashed or natural coffee) and hull them on location, or 2) remove the pulp from the coffee cherries by using a wet mill and dry the coffee seeds, covered in their parchment. These two types of processing techniques, also known as primary processing, are crucial to the ultimate quality and character of the coffee.In Ethiopia, the processor then sells the dried coffee seeds (or beans) to exporters on the Ethiopia Commodity Exchange (ECX) platform. The exporter cleans, polishes, and bags the coffee beans for export shipping. Finally, an importer, broker or roaster imports the coffee beans into the consuming country, after which they will be roasted and be made ready for consumption.<figure class="image"><img src="/uploads/bts_metad_56d665a740.jpg"></figure>WHAT MAKES SPECIALTY COFFEE "SPECIAL"?Coffee can be broadly defined as specialty or commercial grade. Specialty coffee, a term first coined back in 1978 by Erna Knutsen of Knutsen Coffee Ltd., in the simplest definition refers to special geographic microclimates that produce beans with unique flavor profiles.(2) There is a fundamental understanding that specialty coffee beans will always be well prepared, freshly roasted, and properly brewed; one that the Specialty Coffee Association of American (SCAA) has standardized and enforced. The SCAA is considered to be the world’s coffee authority and the largest coffee trade association, with nearly 5,000 members located in more than 40 countries who represent every segment of the specialty coffee industry.The SCAA defines specialty coffee in its green stage as “coffee that is free of primary defects, has no “quakers” (under-ripe or under-developed attributes), is properly sized and dried, presents in the cup free of faults and taints and has distinctive attributes.”(3) In general terms, “specialty coffee is coffee from a known geographic origin that commands a premium price above commercial grade coffee due to its high quality and particular attributes that it possesses.”(4) In the case of METAD, the company produces Yirgacheffe specialty coffee, the quality of which METAD continually ensures at its coffee lab, the first and only private, state-of-the-art coffee quality control facility on the African continent that is <a href="http://www.prnewswire.com/news-releases/metadkabu-coffee-quality-laboratory-becomes-africas-first-private-specialty-coffee-association-of-america-certified-lab-208654311.html">certified by the SCAA</a>. Specialty coffee from this region is considered to be, by some, the highest quality in the world - an opinion that has been gaining popularity over the past several years.<figure class="image"><img src="/uploads/dsc_0739_1_998d048eb3.jpg"></figure>Demand for coffee is poised to hit a record in 2017, as people around the world and in developed markets are increasing their java consumption. Global coffee consumption is expected to grow by 1.2% over the upcoming year, leading to higher prices for coffee beans. “The price for Arabica coffee futures was up 20% in June 2016, marking the biggest monthly gain since February 2014.”(5) Citigroup even estimates that Arabica coffee prices could reach $1.50 per pound by the second half of 2017. To meet this increasing demand for high-quality coffee, international roasters are seeking out traceable and single-source producers in smaller sub-regions of the world. Similar to wine, consumers are willing to buy coffee at a premium if it’s from specific regions, is certified fair trade or organic, is naturally sun-dried, etc. According to a survey conducted by the National Coffee Association, the retail value of the U.S. coffee market alone is estimated to be $48 billion dollars with specialty comprising approximately 55% value share.(6) It is these overall trends that suggest sustained momentum for specialty coffee growth.BRINGING IT BACK TO THE SOURCEIt’s no wonder that with Ethiopia being the epicenter of Arabica coffee, and it ranking among some of the fastest-growing economies in the world, the country is quickly becoming a target for foreign investors seeking attractive returns in the coffee value-chain, as well as domestic and export market opportunities. In fact, coffee is one of Ethiopia’s largest export commodities, with over 55% of the coffee produced in the country sent outside its borders.(7)According to a <a href="https://d3n8a8pro7vhmx.cloudfront.net/eatradehub/pages/860/attachments/original/1433149069/Ethiopian_Coffee_Industry_Value_Chain_Analysis_2010.pdf?1433149069">USAID analysis</a> of the Ethiopian coffee value-chain, coffee generates “70 percent of Ethiopia‘s foreign exchange earnings and provides livelihoods for 15 million Ethiopian smallholder farmers.” The industry employs several hundred thousand workers in processing coffee cherries across hundreds of washing stations and hulling mills around the country.In Ethiopia, government institutions are responsible for the state coffee plantations with approximately 8,000 permanent employees and an estimated 50,000 seasonal jobs.(8) Coffee generates a considerable number of employment opportunities on farms, in the processing plants and in the transport sector. In Ethiopia, coffee constitutes a very important source of seasonal employment for many poor people and most agro-processing employees are women. Altogether, METAD employs 38 permanent staff and several-hundred seasonal staff, 70% or more of which are women. Additionally, they have purchased from, partnered with and/or supported more than 3,500 out growers to provide best practices on growing, harvesting and selling coffee. METAD also creates further social impact in the community surrounding the farm sites by sponsoring a school with over 600 children, constructing new community facilities (such as a school and community center) and working with development partners to build and install new wells.<figure class="image"><img src="/uploads/used_b2a1709f7c.jpg"></figure>Smallholder farmers, those whose plots are less than five hectares (ha), account for 95% of the country’s coffee output.(9) In fact, “average plot sizes do not exceed two ha,” wherein coffee yields remain stubbornly low compared to that of Colombia (1/3 their yield) and that of Costa Rica (1/4 their yield).(10) The country’s remaining 5% of output is produced by plantations, which average more than 50 ha in planted area, and which have been privatized by the government in recent years.”(11) However, because of the predominance of smallholders, the average yield per hectare for all cultivated land is no more than 700 to 800 kg.(12)According to the USDA Foreign Agricultural Service’s <a href="http://gain.fas.usda.gov/Recent GAIN Publications/Coffee Annual_Addis Ababa_Ethiopia_5-12-2014.pdf">2014 Ethiopia Coffee Annual Report</a>, the major reasons for the low coffee production are:<ol><li>Ethiopian coffee farm management system and agronomic practices are traditional and fail to inject new technologies into the country’s coffee production system. In addition, extension services provided to smallholder farmers are inadequate.</li><li>Inadequate use of improved seeds as the supply is limited to areas located near coffee research centers and universities in the country.”</li><li>Historically, there has been a lack of a designated government institution to provide technical support for coffee production. At one time, there was a specialized government agency supporting the production and marketing of coffee. However, it was “dissolved many years ago, leaving the sector with little institutional and technical support from the government.</li></ol>The Government of Ethiopia, though, has recently noted this problem and plans to restructure the coffee development sector by making it a priority value-chain under its Growth &amp; Transformation Plan II - increasing yields from 700 kg/ha to more than 1,100 kg/ha.(12)Ethiopia truly has the potential to increase coffee production and productivity as it has all the necessary “ingredients” including suitable elevation, temperature, soil fertility and sufficient rainfall in coffee growing regions of the country. With the right financial support and guidance, the country could become the number one coffee producer in the world. And METAD, with its clear vision and passionate entrepreneur, is uniquely positioned to become a market leader in Ethiopia’s specialty coffee industry.&nbsp;

Developing Ethiopia’s specialty
coffee sector.

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An analysis and overview of one of Ethiopia’s oldest and most lucrative value chains.

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 Back to the Source: Coffee

<h1 style="text-align:center;">Mama Fresh Injera Attends and Speaks at an ACDI/VOCA Workshop</h1><figure class="image image-style-align-left image_resized" style="width:23.27%;"><img src="/uploads/mftc_logo_tm_1_40e48cdd78.png"></figure>Last week, one of RENEW’s portfolio companies, Mama Fresh Injera PLC, had the honor of attending and speaking at a workshop hosted by ACDI/VOCA’s Agricultural Growth Program-Agribusiness and Market Development (<a href="http://acdivoca.org/our-programs/project-profiles/ethiopia-agricultural-growth-program-agribusiness-and-market">AGP-AMDe</a>). According to ACDI/VOCA’s website, the AGP-AMDe program in Ethiopia “uses a value chain approach to strengthen the agriculture sector, enhance access to finance, and stimulate innovation and private sector investment.”The coffee, chickpea, honey, wheat, maize and sesame value chains are all considered to be of the utmost importance to the U.S. and Ethiopian governments, and consequently to the AGP-AMDe program as well. In fact, this program is part of USAID’s Feed the Future initiative, which focuses on reducing global poverty and hunger by accelerating agricultural growth in 19 developing countries.Over the course of the workshop, AGP-AMDe reviewed the progress of their projects in Ethiopia that spanned across the six value chains (coffee, chickpea, honey, wheat, maize and sesame), and showed a new video that outlined the status of the projects in the Amhara region. AGP-AMDe gave certificates of appreciation to partners of ACDI/VOCA, and highlighted the progress of the companies they provided grants to in the various value chains. This includes the sesame unions and associations for honey, pulses and coffee, the Ethiopian Commodities Exchange, and other government and non-government institutions. AGP-AMDe also mentioned RENEW and how private equity investment is helping local business to grow and create a more robust agriculture sector.<figure class="image image-style-align-right image_resized" style="width:40.2%;"><img src="/uploads/img_6262_63e434109c.jpg"></figure>Hailu Tessema of Mama Fresh served as a panelist on Business Enabling Environment: Access to Finance and Investment discussion, along with other companies and cooperative union leaders. Over the course of the panel, Hailu thanked USAID for helping RENEW and the Impact Angel Network (IAN) partner with Mama Fresh, and discussed how RENEW and the IAN have done much more than simply provide access to finance - they have strengthened Mama Fresh as a company. Hailu outlined the changes that have been implemented since the IAN's investment in Mama Fresh, and encouraged the development community to continue to assist local companies partner with investors like RENEW and the IAN. Hailu concluded that while giving grants to local companies is important, private investment (while harder to obtain) makes Ethiopian companies stronger, because it forces companies to adopt new behaviors and disciplines.The work that RENEW and the IAN are doing in Ethiopia with local entrepreneurs would not be possible without the assistance of USAID and our development partners, like ACDI/VOCA.

Mama Fresh's Hailu Tessema participated as a panelist at last week's AGP-AMDe event.

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Mama Fresh Injera Attends and Speaks at an ACDI/VOCA Workshop

<h1 style="text-align:center;">Our Portfolio: 7 Companies, 1,161 Jobs</h1>One of RENEW's core beliefs is that a thriving private sector made up of robust small- to medium- sized enterprises (SMEs) is the engine of a thriving economy. Since 2013, when RENEW 's Impact Angel Network (IAN) first invested in an Ethiopian SME, the network’s portfolio has grown by six incredible companies across seven additional investments. We believe that investing in these high-growth and high potential companies, and others like them, will create the stepping-stones that lift emerging economies out of poverty.<figure class="media"><oembed url="https://youtu.be/FhLyVJwqS9c"></oembed></figure>To celebrate these successes, we've created a short video that tells part of the story of each company in the IAN’s portfolio. Celebrate with RENEW, the IAN and the entrepreneurs behind these growing companies by watching their stories unfold. And be sure to stay tuned until the end - we have some great tidbits you will not want to miss!

Taking a closer look at the seven companies and entrepreneurs that make up the Impact Angel Network’s portfolio.

Investing in Africa