As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track record of empowering people to employ their skills and improve their quality of life. Each month, we give an overview of the transactions we have signed.
FMO signed a USD 30 million senior unsecured loan facility with its long-standing partner, Armeconombank, in Armenia. The bank will use the facility to finance the growth of its M/SME portfolio. Armenia is a lower-middle-income country where approximately 27% of the population lives below the poverty line. The MSME sector plays a pivotal role in the country’s socio-economic development, with MSMEs making up about 98% of total registered enterprises. However, they contribute only around 25% of GDP and 19% of employment, as access to credit remains a challenge due to perceived risks and insufficient collateral. Through this transaction, FMO and Armeconombank aim to improve access to finance for underserved Armenian MSMEs, supporting the goal of Reducing Inequalities.
As the largest cooperative federation in El Salvador, Fedecredito supports its 54 member cooperatives by providing funding, technical assistance, and advisory services. FMO has signed a USD 30 million senior secured loan, consisting of a USD 20 million committed tranche and a USD 10 million uncommitted tranche. The funds will be on-lent to Fedecredito’s member cooperatives to provide loans to microenterprises and underserved SMEs across El Salvador. This investment aims to reduce inequalities by supporting underserved MSMEs, which comprise most economic units in the country but face significant challenges in accessing financial services. Fedecredito is an ideal partner to bridge this gap, thanks to its extensive experience in the sector and its member cooperatives’ proximity to clients. Additionally, funding and supporting Fedecredito’s cooperative system will impact the wealth of its large number of shareholders (~1.4 million individuals who are both clients and shareholders of the cooperatives).
Banco Azul de El Salvador, S.A. (“Banco Azul”, “the Bank”) is a medium-sized commercial bank in El Salvador. As of December 2023, the bank had total assets of USD 867.2 million and a loan portfolio of USD 610.4 million. FMO is providing a USD 20 million senior term facility, part of a USD 40 million syndicated transaction. The loan includes three tranches: at least 33% for small and medium-sized enterprises (SMEs), at least 33% for green projects, and at least 33% for women-owned SMEs. The SME tranche will help Banco Azul expand its SME portfolio. The Green tranche will fund projects in renewable energy and energy efficiency in El Salvador. The women-owned SME tranche is dedicated to financing women-owned SME clients.
Banco Promerica El Salvador
Banco Promerica in El Salvador (Banco Promerica SV), the 5th largest bank in the country and part of the Promerica Group, received a USD 20 million senior unsecured loan from FMO. This is the first FMO transaction in El Salvador since 2020, targeting a diversified portfolio: 50% to SMEs, 25% to women-owned SMEs, and 25% to green loans. FMO Investment Management also secured a USD 7.9 million participation in the SDG Loan Fund. Banco Promerica SV prioritizes SME growth and sustainability, aligning with FMO’s standards and the group’s strategy to bolster local economies in Central America. As FMO continues to strengthen its relationship with the Promerica Group, mobilizing support remains a priority to expand new financing to the group.
FMO closed a USD 30 million facility with new client EVN Finance Joint Stock Company in Vietnam. EVN Finance, known for its comprehensive product range, focuses on financing renewable energy projects, mainly C&I rooftop solar. In 2022, it became the first financial institution in Vietnam to issue a green bond. Additionally, EVN Finance provides financing to underserved MSMEs. At least 35% of the proceeds will go towards eligible green projects, in line with the FMO green master list, with the remainder supporting inclusive businesses: micro businesses and women-led/owned SMEs. This transaction supports Sustainable Development Goals 10 and 13: Reduced Inequalities and Decent Work. An E&S action plan will be included, and FMO will assist EVN Finance with a Technical Assistance project to enhance its environmental and social risk management system to meet high international standards.
FMO, FinDev Canada, and Proparco, the Dutch, Canadian, and French development finance institutions, announced a USD 100 million syndicated facility for Genneia S.A, Argentina’s largest wind and solar power producer. FMO, acting as lead arranger and facility agent, contributed USD 30 million. FinDev Canada and Proparco contributed USD 40 million and USD 30 million, respectively. The funding will finance the construction of two greenfield renewable energy projects: 90 MW and 180 MW photovoltaic solar plants. This loan will enable Genneia to expand its renewable energy capacity by building two solar PV projects in the Malargüe and Luján de Cuyo municipalities in Argentina. Both projects will supply green electricity to corporate off-takers, helping these companies meet their sustainability targets. The projects will add 270 MW of renewable energy, contributing to Argentina’s goal of increasing non-hydro renewable energy to 20% of the national energy mix by 2025.
Hydrobox is a Kenya-based developer focused on creating small run-off river hydropower plants (HPP) that form mini-grids under the Anchor, Business & Household Customer (“ABC”) model. Approximately 70% of the generated power will be sold to commercial and industrial clients, with the remainder going to small businesses and households. Our USD 7 million senior term facility will fund Hydrobox’s 2.3MW HPP and mini-grids portfolio in Kenya. This is part of a larger USD 9 million facility with ElectriFI. Hydrobox aims to connect people and businesses to a previously unreliable grid, improving livelihoods and supporting sustainable companies. FMO supports Hydrobox’s ambitious strategy to provide renewable power solutions that reduce dependency on fossil fuels, lower carbon emissions, and support local communities and job creation.
