DFCD to support UCHU Spice in developing more climate-resilient agriculture systems.
The Dutch Fund for Climate and Development (DFCD), through its Origination Facility, intends to support UCHU Spice, an established agro‑industrial company operating in Ecuador and Peru. UCHU sources chili peppers from approximately 1,000 smallholder farmers across diverse and climate‑vulnerable landscapes, supplying international food markets through a traceable and quality‑driven value chain.
The project with UCHU has been put forward by WWFNL, which, together with SNV, manages DFCD’s Origination Facility to support the development of investment-ready projects with a strong climate resilience and impact focus.Aided by the technical expertise of WWF Ecuador and WWF Peru, the project with UCHU aims to strengthen climate resilience across UCHU’s chili value chain by supporting the company’s transition towards climatesmart agriculture (CSA). By building governance structures, climaterisk management systems, and technical capacity across the supply chain, the project seeks to stabilise climate‑exposed production systems while safeguarding ecosystems and smallholder livelihoods.
Chili production in Ecuador and Peru is increasingly affected by climate change. Droughts, flooding, water stress, and climate‑driven pest and disease pressures are already undermining yields, production stability, and farmer incomes. These challenges are particularly acute in smallholder‑based systems operating across highly heterogeneous agro‑ecological zones.
While UCHU has strong relationships with its farmer network and well‑established operational capacity, it currently lacks fully structured systems for managing climate risks at scale. Without targeted support, climate variability could further exacerbate production volatility, increase farmer drop‑out, and heighten pressure on sensitive ecosystems.
UCHU’s integrated sourcing and technical assistance model positions the company as a strong platform for scaling climate‑smart agriculture in the chili sector. Its close engagement with farmers, existing agronomic expertise, and established traceability systems provide a solid foundation for embedding climate adaptation into day‑to‑day production decisions.
By formalising CSA standards, strengthening climate‑risk and producer vulnerability assessments, and equipping agronomists and farmers with practical tools, UCHU has the opportunity to improve production stability, enhance farmer retention, and position itself as a climatesmart supplier to international markets, while ensuring zerodeforestation safeguards and sustainable land use. In parallel, the company is exploring the expansion of its processing capacity in Peru, which would further strengthen its ability to meet growing market demand and consolidate its role as a reliable, climate-resilient supplier.
Through the DFCD Origination Facility, grant funding will support UCHU in building the institutional and technical foundations required for climate adaptation across its chili value chain. Support will focus on the following activities:
These activities will be carried out with the active technical involvement of WWF Ecuador and WWF Peru, whose local expertise and on-the-ground presence will play a crucial role.
Upon securing investment, the project is expected to:
“This partnership with DFCD marks a defining moment for UCHU. At UCHU, every chilli pepper we source represents the work and trust of smallholder families across Ecuador and Peru. DFCD’s Origination Facility support gives us the means to protect that work against an increasingly unpredictable climate through stronger governance, climate smart agriculture standards and the technical capacity our agronomists need on the ground. We are turning this partnership into concrete climate resilience for the farmers who make our supply chain possible.”
-Paul Palacios, General Manager, UCHU Spice
“UCHU has already built a strong foundation, connecting smallholder farmers across Latin American landscapes to global markets, while creating opportunities for income diversification. Through DFCD’s support, this foundation is strengthened with climate-smart practices, ensuring that this bridge is not only scalable, but also resilient and sustainable.”
-Tania Evia, Regional Lead LAC, DFCD Origination Facility
With DFCD support, UCHU will work to validate and scale an integrated, climate‑resilient operating model that combines governance strengthening, climate‑smart agriculture adoption, and robust monitoring. This approach aims to support resilient food systems, biodiversity protection, and inclusive livelihoods across Ecuador and Peru, while strengthening the long‑term sustainability of smallholder‑based chili production.
For more information, please contact: Tania Evia, DFCD Regional Lead for LAC at tevia@wwfbolivia.org.
In case you have any grievances in relation to this project of the DFCD’s Origination Facility, please contact the service desk at servicedesk@wwf.nl.
The Dutch Fund for Climate and Development (DFCD) is a climate fund, dedicated to supporting climate adaptation and mitigation projects which benefit vulnerable communities and landscapes. Initially funded by the Dutch government, it is powered by a consortium of four expert organisations: FMO (Dutch Entrepreneurial Development Bank), CFM (Climate Fund Managers), SNV, a global development partner, and WWF Netherlands.
