Guatemala 

INVESTMENT PRESENTATION

THE PROPOSAL

In Guatemala, the Hand-in-Hand Initiative is actively supporting the Investment Program for the Expanded Agricultural Economic Development in the Adjacency Zone and the Polochic Valley (2022-2026). This program aims to promote agricultural economic development, address poverty, and alleviate food insecurity in the region. By focusing on the key value chains of cocoa, cardamom, and coffee, the initiative seeks to leverage innovation, technology, infrastructure, and production support services to drive sustainable growth and empower local communities.

The targeted areas for intervention, namely the Adjacency Zone and the Polochic Valley, have significant potential for agricultural production. In the Polochic Valley, where 75% of the population is engaged in farming and 91% live in poverty, there is an opportunity to develop cocoa (4,605 hectares), cardamom (36,993 hectares), and coffee (14,400 hectares) production. Similarly, in the Adjacency Zone, with a total population of 174,211 and 70% engaged in farming, focusing on cocoa (8,807 hectares) and cardamom (36,868 hectares) can help address the high poverty rate of 56%.

The total investment cost for the proposal is estimated at US$92.67 million, demonstrating a significant commitment to fostering economic development and improving livelihoods. With an expected internal rate of return (IRR) of 20% and a net present value (NPV) of US$28.2 million, these investments have the potential to generate substantial economic benefits for the region. The program aims to benefit 17,500 households, comprising 91,000 farmers, including 39,000 women and 23,400 young people.

The investment proposal consists of four components, each targeting specific areas of intervention and opportunities of development.

Poverty

Potential

Efficiency

COMMODITIES AND INTERVENTIONS

Inclusive and Resilient Agro-Productive Promotion in Prioritized Value Chains

This first component aims to enhance agricultural productivity and resilience in the prioritized value chains of cocoa, cardamom, and coffee. With an estimated cost of US$18 million, the two investment opportunities within this component focuses on (i) agricultural development through the establishment of new and the rehabilitation of existing agroforestry systems, and (ii) research, development and innovation by improving the quality of inputs and promoting the adoption of new technologies.

Among the main outcomes of these interventions, it is expected 15,420 hectares of agricultural land under sustainable production, training and assistance of 12,500 producers in sustainable agricultural practices, and 4,291 hectares with improved plants.

Agro-Industrial Development and Commercialization

Focused on the development of agro-industries and the improvement of commercialization processes, this component aims to add value within the cocoa, cardamom, and coffee value chains. With an estimated cost of US$8.8 million, the investment opportunities in this component encompass agro-industrial development, initiatives for value addition, and the strengthening of organizational and associative commercialization. 

The anticipated outcomes include improved participation of 2,500 producers in value chains, the establishment of 50 new units for transformation and value addition, and the creation of better job opportunities for 800 individuals within the value chains.

Infrastructure for Production and Related Services 

To enhance production infrastructure and related services in the Adyacencia Zone and the Polochic Valley, this component focuses on investment opportunities in rural development roadways and enabling telecommunications. With an estimated cost of US$61.5 million, the expected results encompass improved access to roads for 29,882 people and increased access to electricity for 9,013 individuals, enabling them to enhance their agricultural productivity and connectivity.

Sustainable Management of Natural Resources and Green Transformation

This component emphasizes the sustainable management of natural resources and promotes green transformation within the cocoa, cardamom, and coffee value chains. The investment opportunities within this component include agroforestry conservation, technical assistance and training for sustainable resource utilization and climate change adaptation practices. With an estimated cost of US$4.3 million, the expected outcomes include improved forestry management covering 700 hectares, the conservation of 500,000 cubic meters of harvested water, and the saving of 5,088 cubic meters of firewood.