news - Monthly Transaction Overview - September 2022

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Monthly Transaction Overview - September 2022

October 4, 2022

As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. Our belief is that a strong private sector leads to economic and social development, and we have a proven track-record of 50+ years in creating development impact by being additional in financing the private sector in low- and middle-income countries.


Our recent focus has been on business continuity in the wake of the COVID-19 pandemic as we enable entrepreneurs to increase inclusive and sustainable prosperity. It is precisely now, during these times of crisis, that it is important to continue investing in developing economies that are expected to be hit hard by the pandemic. While local governments are working hard to minimize the impact on their people and economies, we are needed now more than ever. Hence, we continue to empower entrepreneurs in developing economies to build a better world and boost resilience to withstand the pandemic.

Agribusiness, Food, & Water

United Exports Ltd

Vertically integrated blueberries company across Southern Africa

FMO provided a EUR 7mln B-Loan participation in a EUR 14mln IFC-led transaction to United Exports Limited, a vertically integrated company that grows, distributes, and sells high quality blueberries originating from South Africa, Zambia and Zimbabwe. The funding will be used to provide frost, or climate-mitigation capital expenditure, as the farms face up to 60-year low temperatures, and to strengthen the capital structure with various initiatives. This 30% Green facility aligns with the AFW strategy of investing in climate change adaption, while also contributing to development impact through decent work and economic growth for roughly 2500 temporary and permanent employees, many of which are women.

Energy

Zarafshan

Wind farm in Uzbekistan

FMO invested in Zarafshan, a wind farm in Uzbekistan, by participating in this transaction with 3 B-Loan Participations (of USD 10 mln each) with 3 multilateral development banks: ADB, EBRD, and IFC. A 500 MW wind power project, it is the largest renewables project in Central Asia and will provide enough electricity to power 500,000 homes while displacing 1.1 million tonnes of carbon dioxide per year. It is also FMO’s first investment in renewables in Uzbekistan. The wind farm will support Uzbekistan’s goal of meeting 25 percent of electricity needs from renewables by 2030, and it is planned to be fully operational by the end of 2024.

Financial Institutions

Banco de Antigua

Consumer- and MSME-bank in Guatemala

FMO provided the equivalent of USD 7 mln via its MASSIF fund in local currency to Banco de Antigua. It is a small bank (USD 200mln in total assets) with a loan portfolio dedicated to low-income consumers (69% of portfolio) and MSMEs (33%) in rural areas of Guatemala. FMO’s financing will target mainly microentrepreneurs in the rural areas of Guatemala. The transaction qualifies 100% for Reduced Inequalities and contributing together to SDG 8 and SDG 10. This transaction represents BDA’s first DFI funding ever, and its first international loan in many years. The Massif funds will be disbursed in local currency through a synthetic local currency structure.

Northern Arc Capital

Non-Banking Finance Company in India

FMO signed and disbursed a USD 50 mln loan facility in local currency for our long-standing client Northern Arc Capital in India. Northern Arc’s mission is to provide efficient and reliable access to debt capital to financial institutions and non-financial corporates that support low-income households and small businesses. Northern Arc acts as a financial intermediary between companies without material access to the capital markets and larger domestic and international investors on the funding side and has enabled over USD 13 billion of financing to over 400 partner institutions. They have positively impacted over 54 million lives, of which more than 42 million were women. The latest loan facility will be utilised for on-lending in the MFI space with on-lending ticket size less than USD 10K. The remainder will be used to on-lend to financial institutions with end-beneficiaries in the commercial vehicle finance, affordable housing finance and agri finance space. 

Private Equity

Sahyadri Farms Post Harvest Care Limited

Farmer-led company in India

Alongside Korys, Proparco, and Incofin, FMO contributed to Sahyadri Farm’s round of growth capital to raise Rs. 310 core (equivalent to almost EUR 40 mln), to help farmers run their businesses in a more profitable and sustainable way. Sahyadri Farms walks with its farmers from their choice of crops to the farming practices they employ, from the inputs they use to how they harvest and sell their agricultural products. With the capital, the company wants to expand its processing capacity for fruits and vegetables-based products, set up a biomass plant to generate electricity from process waste and enhance its infrastructure, like packhouses.

Horizon Capital Growth Fund IV

Fund focused on fast-growing tech and export companies in Ukraine

FMO announced a USD 20 mln commitment to Horizon Capital Growth Fund IV (HCGF IV), managed by Horizon Capital, a leading private-equity firm investing in fast-growing tech and export-oriented companies in Ukraine and the near region. HCGF IV’s strategy will be focused on growth equity investments, in tech and export-oriented small and medium-sized enterprises (SMEs) in Ukraine and Moldova. With the commitment of FMO and other first close investors, HCGF IV has achieved a first closing of USD 125 million, exceeding its USD 100 million initial goal, and reaching 50% of HCGF IV’s target size, aiming to raise the Fund in full within one year.

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