Commercial Feasibility Study for Establishment of Food Storage and Processing Facilities in Uganda

Description

Wellspring was contracted by FCDO to support Ugandan Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) to assess the commercial feasibility of developing post-harvest processing, storage, and trade facilities across Uganda. MAAIF were considering a loan from UK Export Finance to finance these facilities, with the view to reduce post harvest losses, increase farmer incomes, improve climate resilience, and increase export capacity in the grain, cassava, tea and fruit value chains.

The Wellspring team first conducted site visits to 60 shortlisted businesses. This included 14 “deep dive” visits to collect detailed financial and operational data and 46 “validation” visits to collect high-level site and sponsor data. We then conducting market systems analysis to identify key bottlenecks across the four value chains – this included conducting 5 focus group discussions and drawing on secondary market data. Based on the data gathered during the site visits, we then developed customisable blueprint financial models for 10 processing and storage scenarios across four value chains, as well as tailored models for the 14 deep dive sites.

Our final report provided MAAIF with guidance on which value chains and processing and storage scenarios have the potential for commercial feasibility, and recommended strategic financing (e.g. types of on-lending arrangements) and facility design options, taking into account decisions already made by MAAIF and the investment readiness of the 60 sites visited. We also proposed a screening and due diligence framework which MAAIF could use to conduct a detailed assessment of all potential projects to determine full commercial feasibility (e.g. including credibility of the sponsor, level investment readiness, and robustness of business plan.

Funders and clients

Foreign Commonwealth Development Office

Team members

Joel Moktar, Andrew Ritchie, Ann Kitonga, Robert Anyang, Florence Kabugo, Adam Gross, Mat Hague, Zainab Asiimwe

Related projects