FMO, FinDev Canada and OeEB support critical food supply in Africa through a working capital loan to ETG
FMO, FinDev Canada, and OeEB (the Development Bank of Austria) announced a USD 115mln syndicated loan facility that will allow ACF, one of the main trading companies of Export Trading Group (ETG) to improve and expand its operations in Africa, with FMO acting as lead arranger. The syndicated facility will indirectly support an estimated 600,000 smallholder farmers and the communities where they live and work, while also contributing to more sustainable and climate-resilient agricultural practices across the continent.
Pieternel Boogard, Director Agribusiness, Food, and Water of FMO, the Dutch entrepreneurial development bank, said: "We are very pleased to strengthen our commitment towards ETG's mission and empower small holder farmers across Africa for a brighter future. ETG's impact and success contribute to a stronger African agricultural sector, which will reduce poverty of smallholder farmers in Africa and improve their overall wellbeing through ETG’s sustainable and climate-smart programmes focused on agriculture and agro-processing. We are proud to have arranged this facility along with our fellow DFIs."
"The growth of ETG has been impressive and its contributions to the transformation of African agriculture equally so," said Paulo Martelli, Chief Investment Officer of FinDev Canada. "By participating with other development finance institutions, such as FMO from The Netherlands and OeEB from Austria, we are helping ETG move to the next level of its development. The facility will help make agriculture and food production in Africa more efficient, more sustainable, and more beneficial to everyone."
"We are proud to join forces with ETG who has played a crucial role in agricultural development in Africa over the past decades", added Sabine Gaber, Member of OeEB's Executive Board. "Supporting smallholder farmers is especially important in light of the ongoing pandemic and growing effects of climate change. With this financing we can support agricultural supply chains which contributes to food and job security for populations in need."
Anish Jain, ETG's Chief Treasury Officer, said: "We are fortunate to have likeminded partners such as FMO, FinDev and OeEB that are as passionate about Africa and its people. ETG was built on the fundamental of elevating farmers' livelihoods and bridging supply chain and infrastructure gaps in Africa. This facility will provide ETG with the necessary support to emphasize our efforts and augment our impact."
Enabling market growth
The syndicated loan facility will allow ETG to strengthen and expand its operations across the agricultural value chain. Improved processing capacity and logistics will lead to less post-harvest crop loss and food waste. These improvements will not only support the livelihood of existing farmers, but also create an estimated 5,000 new jobs in Sub-Saharan Africa. With 35% of the jobs to be created in the continent’s least-developed countries and 50% being taken up by women, this will further contribute to SDG 10. In addition, this working capital loan will support access to critical food supplies across Africa.
Development Finance Institutions and COVID-19
DFIs such as FMO, FinDev Canada and OeEB are committed to remaining open for business to serve target regions during the COVID-19 pandemic. Investment will help ensure that liquidity continues to reach developing markets, helping them to recover from the economic and social consequences of this crisis.
