India: Study for financing of aquaculture value chains

Project Background

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the KfW Development Bank assessed the feasibility of a financial cooperation project with the Indian Government in the aquaculture sector. The feasibility study was intended to define intervention areas within the fisheries and aquaculture sector in India and thus design a programme concept for the Indo-German financial cooperation (FC) grant project with an earmarked budget of several million EUR over five years from 2023 to 2028, considering the introduction of an interest-reduced loan scheme at a later stage of project implementation. The ten principles of agroecology formulated by FAO served as guidance for the technical approach.

The proposed programme focused on supporting the sustainable transformation of India's aquaculture and fisheries sector by conducting an open programme based “Request for Proposal (RfP)” approach for selected eligible sub-projects in the fields of sustainability enhancement within the sector. This included the protection of existing fish resources, the prevention of post-harvest losses and food safety. The grant financed approach was intended to serve as a “pilot in real terms” to subsequently roll out a larger-scale model (most likely loan-finances).

Objectives

COFAD has been tasked to analyse in depth the capture fisheries and aquaculture (including shrimp production in marine/brackish water), excluding the marine capture fisheries sector in six States of India (Andhra Pradesh, Odisha, Chhattisgarh, Manipur, Assam, Tripura), the state of financial institutions and banking products available for the fisheries and aquaculture sector and thus the design of a programme concept for the Indo-German financial cooperation (FC) grant project. COFAD services extended over a six-months period including missions in India.

Activities and/or Results

• Aquaculture and fisheries sectorial assessment / SWOT and need assessment for capacity building and financing sector (problem analysis)
• Financial sector assessment including national banks (NABARD) and private banks 
• Execution of interviews and concertation workshops (6) in each of the states with fisheries / aquaculture value chain stakeholders (private sector, public institution, donors, etc.)
• Elaboration of the Exploratory report presenting the sectorial review, and projects options to KfW
• Identification and assessment of the political partners, the project executing agency (PEA) for the project and the financial cooperation set up possible between PEA, banks and private sector
• Design and financial calculation of the financial cooperation project for development of fisheries and aquaculture value chain
• Elaboration of financial tools and mechanisms needed for the implementation of the FC programme
• Elaboration of the financial and technical eligibility criterion for the credit line, subventions and grants applicants (private sector)
• Elaboration of the Environmental and Social Management Framework (ESMF) for the intended Indo-German FC programme
• Implementation of national workshops for the presentation of findings and proposition of project design and content
• Delivery of the final feasibility study to KFW as well as one additional simplified version for the political partners