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Mountain Hazelnuts

Blending Happiness with Hazelnuts in Bhutan

In 2015, IFC, ADB and GAFSP together invested US$12 million in Mountain Hazelnuts, a project to promote hazelnut production by smallholder farmers across Bhutan, the land of Gross National Happiness

Photo 漏 Mountain Hazelnuts

番茄社区 the Project

In Bhutan, the land of Gross National Happiness, agriculture is the main source of livelihood for more than half the population but accounts for less than one-fifth of GDP. Along the vertiginous Himalayan slopes of this land-locked country, over 90% of Bhutan鈥檚 poor live in rural areas, where they lack accessible, good-quality land and other resources. Opportunities to produce food along these mountain top farms and narrow valleys are limited, with little potential to expand irrigation facilities. In addition, external inputs like fertilizers are inadequate, while farm technology is at a low level. An underdeveloped private sector and high youth unemployment rate further impacts poverty levels.聽

This project represents GAFSP鈥檚聽first agribusiness investment in Bhutan, a small聽kingdom in the Himalayas. The project supports the expansion of Mountain Hazelnuts, a semi-greenfield聽smallholder-based company, to take advantage of the聽growing demand for hazelnuts from European聽confectionary and snack producers in Asia. With聽GAFSP support, Mountain Hazelnuts will provide hazelnut tree plantlets, inputs, and support to local聽farmers free of charge. The trees will be planted on聽fallow land that otherwise has no commercial use for聽the farmers. Once the trees produce hazelnuts, the聽company will purchase the crop from the farmers at a guaranteed minimum price and market the hazelnuts聽to international buyers.

This project will be carried out聽in conjunction with the Asian Development Bank聽(ADB). IFC and ADB will each invest US$3 million of聽equity in Mountain Hazelnuts, which will then be matched by a US$6 million investment by the Private聽Sector Window of GASFP.

Country

  • Bhutan

Project Status

Active

Funding

Private

Supervising entity

  • IFC

Our Impact

Bhutan
Impact Story

Blended finance in a Bhutanese nutshell

The unusual partnership between a small Bhutanese start up and a Buddhist nun is representative of a new trend in development financing known as 鈥榖lended finance鈥欌 the mixing of public, philanthropic and private capital in emerging and frontier markets.

Learn More
bhutan
Interview

Interview with Founders of Mountain Hazelnuts

Founders of Mountain Hazelnuts discuss hazelnuts, development needs in Bhutan, and the largest motorcycle gang in the Himalayas

Read now
bhutan
Case Study

Bhutan: Blending Happiness and Hazelnuts with Finance

In 2015, IFC, ADB and GAFSP together invested US$12 million in Mountain Hazelnuts, a project to promote hazelnut production by smallholder farmers across Bhutan, the land of Gross National Happiness.

Results

The project is expected to reach 15,000聽farmer households, most located in Bhutan鈥檚 poorer聽eastern regions. Farmers will grow hazelnuts to聽generate income on degraded, unused land, which聽would otherwise be left barren. Farmers cannot聽replace existing crops with hazelnuts, which makes the聽income derived from hazelnuts entirely incremental.聽These additional earnings from hazelnuts sales are聽projected to eventually double the household income聽of a large portion of participating farmers. Including all聽farmer household dependents, this translates into a聽project impact of approximately 15 percent of Bhutan鈥檚聽population.聽

Contact

Mr. Niraj Shah
Head, GAFSP Private Sector Window聽
nshah1@ifc.org
Washington, DC聽
Tel: 202 473 3743

Documents