FMO andFinDev Canada today provided a syndicated loan facility of USD 72 million to the Latin American Agribusiness Development Corporation S.A. (LAAD), a unique corporation focused on providing financial services to agribusinesses in Latin America. The facility is led by FMO and will help expand agricultural financing to SMEs in over 15 countries across most of rural Latin America and the Caribbean.
Founded in 1970, LAAD finances small and medium-size agribusinesses to promote economic, environmental, and social development in Latin America with a focus on sustainability. Over the course of 50 years, they have successfully demonstrated the contribution of profitable private enterprise to drive agricultural development.
Linda Broekhuizen, Chief Investment Officer at FMO said: “LAAD is a committed and experienced financial institution with which FMO has built up a long-standing relationship. LAAD targets the productive agricultural sector in Latin America, which aligns well with FMO’s strategic objectives. After several bilateral facilities with LAAD over the years we are excited to sign our first syndicated loan with LAAD and engaging with a new syndicate partner for FMO, Findev Canada.”
“LAAD’s agribusiness expertise and successful track record in the region makes them an ideal partner for us to contribute to significant impact in the rural/agricultural sector in Latin America, so important for job creation and poverty reduction,” said Paulo Martelli, Director of Investments at FinDev Canada. “It also presents us with the opportunity to indirectly support SMEs during the COVID-19 crisis, when financing is difficult to obtain.”
Gustavo Martinez Cappetta, Chief Executive Officer at LAAD said: “FMO has been one of LAAD’s key financial partners for many years, supporting our mission of financing the development of the private agribusiness sector in Latin America. We are grateful for their trust in LAAD and even more so for arranging this syndicated transaction and bringing FinDev Canada as their new syndicate partner during these unprecedented times. This funding will allow us to expand our financial support to many SME farmers in Latin America who play an important role in the food supply chain of the global community. “
This syndicated loan will contribute to local market development in the rural areas where LAAD’s clients operate through local employment. LAAD estimates that its current operations support 60,000+ indirect jobs annually, roughly 20,000 of which are held by women.
LAAD operates through regional and country offices, enabling them to maintain close client contact, optimize their operations and maximize revenue, adding approximately USD 38 million of value addition to local economies.
The DFI loan will also help support LAAD’s continued commitment to support sustainable food production. LAAD leverages internal know-how to advise clients on agribusiness practices and channel funding towards sustainable climate-focused investments. LAAD also requires that each loan has an Environmental and Social assessment before approval, which helps them advocate sustainable business practices.
LAAD also supports its clients in achieving internationally recognized standards for food production, with their portfolio supporting many companies with certifications such as Rain Forest Alliance, Fair Trade, Organic and UTZ.
DFIs like FMO and FinDev Canada 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.
Latin American Agribusiness Development Corporation S.A. (LAAD) is a private investment and development company whose mission is to finance small and medium-size agribusiness projects to promote economic, environmental and social development in Latin America under sustainable standards. For more information please visit us at www.laadsa.com
About FinDev Canada:
Development Finance Institute Canada Inc., operating under the FinDev Canada brand, is a Canadian institution dedicated to providing financial services to the private sector in developing countries with the aim of combating poverty through economic growth by focusing on three main themes: economic development through job creation, women economic empowerment, and climate change mitigation. The Development Finance Institute Canada Inc. is a wholly-owned subsidiary of Export Development Canada (EDC). Find out more about FinDev Canada here.