news - Monthly Transaction Overview - December 2023

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. 

Agriculture, Food & Water  

Sama al-Manar
Importer and distributor of soybean meal and corn in Iraq

FMO signed a USD 31.5 mln senior loan facility to Sama al-Manar, an Iraqi company of our longstanding partner, Tiryaki Group based in Istanbul, Türkiye. FMO partners IFC and Proparco on this transaction that totals USD 112.5 mln. Sama Al Manar imports soybean meal and corn and distributes them in Iraq. The Project financed by FMO and its partners consists of building and subsequently operating a soybean-crushing and corn-storage facilities in Umm Qasr Port of Basra in southern Iraq, replacing imports of soybean-meal with soybean and continuing the business of selling corn and soybean meal from its own production. By investing in fragile states such as Iraq, FMO supports the revitalization of Iraq’s private sector and helps reduce the dependence on the petroleum sector in the Iraqi economy.

Robust International
Trader of agricultural commodities such as cashew nuts, sesame seeds and rice

Singapore based Robust Intl. received a USD 50mln facility from FMO, BP, FIM and Finnfund. Robust operates in all major cashew and sesame producing countries in Africa and will invest in super modern processing facilities in Mozambique, Burkina Faso, and Ivory Coast. Processing is now done in Asia. Smallholder farmers will benefit since Robust will buy more directly from the farmgate. This means better product traceability and more income for the farmers. Moving processing from Asia to Africa also means more jobs in Africa and increased export value. Raw cashews now travel directly to Europe, reducing Co2 emissions.

Bajrang International FZC
Agricultural commodity trader, food processor and supply chain manager across Africa

FMO signed a USD 15mln senior loan with Bajrang, an agricultural commodity trader and processor based in UAE and active primarily across Malawi, Mozambique, Tanzania and Zambia. The Group operates from farm gate aggregation (mainly soybeans, sesame, peas) & inputs distribution (fertilizers, PP bags) up to packaging manufacturing, food processing (e.g. soy flakes, maize flour) and export of commodities. FMO’s investment will support the construction of additional warehouses and processing plants in Malawi, which fits our Agri department’s strategy to increase value addition in origin countries. Malawi is a LDC country – thus providing a Reducing Inequality Label to the transaction.

Suzano S.A.
Integrated forestry, pulp and paper company in Brazil

FMO signed a USD 40mln B-participation in an A/B syndicated facility arranged by IFC for Suzano S.A. Based in Brazil. Suzano S.A. is considered a global reference in the development of products made entirely from planted eucalyptus forests and one of the largest vertically integrated producers of eucalyptus pulp and paper in Latin America. The proceeds of the loan will be used for the construction of Cerrado Project, a greenfield pulp mill, including the development of eucalyptus plantations to be consumed by the mill, in Ribas do Rio Pardo, state of Mato Grosso do Sul. The transaction has the FMO Green Label based on the Climate Mitigation factors: (i) the plantations will obtain relevant sustainability certification, (ii) the mill design is based on Best Available Techniques to improve resource efficiency and (iii) the mill will generate 180 MW of surplus energy stemming from a second-generation biogas recovery boiler and biomass boiler, which will be exported to the national grid.

Energy

Electronic JRC (“Monte Plata”) Phase II
Solar PV project in Dominican Republic

The project consists of a 60 MW solar PV plant in two phases of 30 MW each, in Monte Plata province in the Dominican Republic. FMO is existing lender in Phase I, and has provided USD 15 mln for the financing of Phase II. FMO has also catalysed USD 30 mln from CIFI, who is replacing previous lender in Phase I and will be financing together with FMO the Phase II development. The financing is 100% Green and will add to the renewable energy mix of the Dominican Republic, a country which has abundant solar and wind resources and is very committed to renewable energy, but which still has an energy matrix majority comprised by fossil fuels.

Nithio FAIR (Nithio FI B.V.)
Debt fund focussed on energy access sector in Sub-Saharan Africa

FMO committed a USD 10 mln senior loan facility to Nithio FAIR, with the option to disburse in local currency (KES/NGN). Nithio FAIR is structured as a permanent vehicle, managed by Nithio Finance Inc, that provides financing to companies in the energy access sector in Sub-Saharan Africa. Nithio’s investees are mainly companies that sell Pay-as-you-go solar solutions to households without access to (reliable) electricity, providing them with a significant improvement of quality of life. Nithio uses a machine learning based analytics solution to standardize credit risk assessment by predicting repayment risk at household level.  FMO’s loan supports Nithio in growing the investment portfolio and in addressing the demand for LCY funding.

SIMA C&I Solar Green Bond
Solar Energy SME-focussed debt fund in Sub-Saharan Africa

FMO together with various Multilateral and Development Finance institutions concluded the first close of USD 130 mln investments into the debt fund. The FMO funding consisted of a USD 10 mln (FMO-A) and USD 10 mln (BP) loan. The fund manager is a longstanding partner, with FMO having invested in 2 previous funds managed by SIMA. The transaction will give SME solar energy services companies access to debt funding that is generally not available or economically unfavourable in the countries they operate. Lenders participate in the fund by purchasing 10-year notes with a floating coupon rate. SIMA funding products to SME’s will include working capital, inventory finance and project finance facilities.

Financial Institutions

NMB Bank PLC “NMB”
Universal bank in Tanzania

FMO participated with USD 30mln investment in the USD tranche of NMB’s Jamii Sustainability Bond a USD400mln 10 year multi-currency bond programme. NMB is a longstanding and strategic client of FMO since 2013 and holds a significant position as one of the two largest banks in Tanzania. The bank is distinguished as a front-runner in both gender and sustainable finance initiatives, and the bond proceeds will be used to reinforce this position through financing projects in the green and social spaces helping to address inequalities in Tanzania and thereby increasing the overall resilience of the economy. Through this investment, FMO also contributes to the development of capital markets in Tanzania and encourages responsible financial practices, attracting like-minded socially conscious investors.

CRDB Bank PLC “CRDB”
Universal bank in Tanzania

FMO and Proparco jointly provided a USD 125mln senior term loan with FMO contributing USD 75mln and Proparco contributing USD 50mln. CRDB is a new client for FMO and is one of the top two banks in Tanzania. The funding will be used to on-lend to underserved segments, including women-owned SMEs and agribusinesses and with a dedicated portion to financing green assets and on-lending to CRDB’s subsidiary in Burundi. The funding aims to promote CRDB’s green and inclusive financing agenda in Tanzania and Burundi – two LDCs that experience high levels of inequality and suffer from the effects of climate change.

Banco Pichincha
Universal bank in Ecuador

Banco Pichincha is the largest bank in Ecuador and an FMO client since 2011. We disbursed a USD 70mln syndicated subordinated facility, which will support Banco Pichincha to maintain its capital strength and support the bank’s organic growth through on-lending to women-owned MSMEs and green projects in Ecuador. Banco Pichincha is serving approximately 5 million customers and its key activities and initiatives are well aligned with FMO’s strategic objectives. The bank plays an important role in advancing the sustainability and financial inclusion agenda in Ecuador for which it received multiple awards and recognition. This facility refinanced our existing syndicated subordinated facility, with FMO acting as lender, agent and arranger, mobilizing ~USD 50mln from trusted partners such as Proparco, ResponsAbility and Triodos.

Eco Business II Sub-Fund
Fund focused on ecologically sustainable businesses

Eco Business II Sub-Fund (EBF II) is a Luxembourg based open-ended debt fund that invests in ecologically sustainable businesses, with a special focus on fighting deforestation across the SSA region. EBF II was launched in 2019 and is managed by Finance in Motion (“FiM”), which is a longstanding partner of FMO, and we are invested in several of its managed funds. The Fund provides senior loans, subordinated debt, and high-quality, tailored technical assistance programs to local FIs in SSA that on-lend to sustainable businesses/projects (i.e. certified or identified as green). FMO disbursed USD 20mln for an investment in senior shares, which is a top-up of our existing exposure dating back to 2019. FMO’s investment in EBF II will contribute to biodiversity conservation and sustainable use of natural resources, which is directly in line with SDG 13. Being one of the first investors, FMO’s stamp of approval is expected to attract additional investors to the Fund.

Banco de la Produccion S.A. Produbanco
Universal Bank in Ecuador

FMO arranged and signed a USD 44mln syndicated subordinated A/B loan with Banco de la Producción S.A. Produbanco (‘’Produbanco’’), the second largest universal bank in Ecuador. Produbanco is owned by the Promerica Financial Corporation, both long standing clients of FMO. Half of the proceeds from facility will be earmarked to on-lend to green projects in Ecuador in accordance with FMO’s criteria, and expected to finance sustainably certified projects and energy efficiencies in a wide range of sectors. The remaining portion of the loan will be used to finance Small and Medium Enterprises (‘’SMEs’’), including Women owned/led SMEs. Through this facility, FMO realizes its strategic goals of supporting economic growth and job creation by financing SMEs, reducing gender inequalities, contributing to a greener economy and mobilizing other investors as FMO financed USD14mln of the facility and the remaining USD30mln was provided by financing partners. Produbanco plays an important role in providing access to finance to SMEs, a critical segment in supporting job creation and has ambitions to grow its green and gender portfolio. Given the current macroeconomic situation in Ecuador, providing an 8-year subordinated debt is relevant, as this funding will also strengthen the Tier 2 Capital base of Produbanco and finance organic growth.

Promerica Financial Corporation
Banking holding company operating in Latin America

FMO arranged and signed a USD 85mln syndicated A/B loan with Promerica Financial Corporation (‘’PFC’’), a regional banking group holding established in 1991 with subsidiaries in Central America, the Caribbean and Ecuador operating under the name Grupo Promerica. PFC has consolidated total assets of USD 20.7bln and a loan portfolio of USD 13.8bln and is a long-standing client of FMO. The facility includes USD 25mln provided by FMO and USD 60mln provided by financing partners, and the majority of the proceeds will be used by the holding to provide Tier 1 or Tier 2 capital to its banking subsidiaries Ecuador, Panama, Guatemala, El Salvador, Costa Rica and the Dominican Republic. A small portion of the facility will be used to repay a pre-existing syndicated facility arranged by FMO and maturing in 2024. By supporting the strengthening of the capital position of its subsidiaries and therefore supporting loan growth, the transaction is intended to contribute to FMO’s strategic goal to support economic growth and job creation in those markets.

Prime Bank PLC
Private Commercial Bank in Bangladesh

FMO signed a USD 50 million loan transaction with Prime Bank PLC, one of the leading private commercial banks in Bangladesh. Established in 1995, Prime Bank PLC has a longstanding track record of offering high-quality and impact-driven banking services to Corporate, MSME and Retail customers. The loan has a four-year tenor and comprises a committed and uncommitted tranche of USD 25 million each. The proceeds support portfolio growth and will be used for onward lending to SMEs (60%) and eligible green projects (40%). At least 40% of the SME loans will be extended to Agriculture, Women and Youth sub-borrowers. Overall, the project directly promotes SDG 8, 10 and 13.

Vietnam Prosperity Joint Stock Commercial Bank
Leading universal private bank in Vietnam

FMO signed a USD 35 Million senior unsecured term facility agreement with new client Vietnam Prosperity Joint Stock Commercial Bank (“VP Bank”). The facility is part of a syndication led by IFC that comprises a five-year senior unsecured facility to VP Bank. At least 15% of the funds will be used to on-lend to green projects. The remaining part will be on-lend to SMEs, of which at least 20% to woman-owned SMEs. This transaction aligns well with FMO’s strategic goals and supports the Vietnamese sustainability agenda.

PT Tirta Rindang Unggul Ekatama Finance
Vehicle financing institution in Indonesia

FMO closed a senior secured loan facility of USD 15mln in local currency with new client PT Tirta Rindang Unggul Ekatama Finance (“True Finance”). True Finance is a multi-finance company based in Indonesia, offering second-hand vehicle financing mainly for productive purposes in the local market. It serves entrepreneurs, amongst which agricultural, rural and individual businesses that would otherwise have difficulty attracting financing from banks. The on-lending requirement is 100% inclusive businesses including micro businesses, agriculture and rural MSMEs. 

Ugro Capital Limited
India-based small business lending platform

FMO signed a LCY equivalent of a USD 30 million Non-Convertible Debentures with UGRO Capital Ltd. UGRO Capital is a valued addition to FMO's client portfolio, being a listed NBFC actively engaged in (M)SME lending. UGRO stands out by revolutionizing the (M)SME lending landscape through data-driven solutions, strategically shifting the emphasis from collateral to business fundamentals. This approach enables UGRO to deliver timely and tailored credit solutions, thereby empowering (M)SMEs. The allocated proceeds from this four-year facility will be 70% earmarked for Green initiatives and 30% for (M)SMEs (Reduced Inequalities) lending. FMO takes pride in the partnership with UGRO, supporting the company as they transition from the development to scale-up phase. This collaboration aligns with FMO’s commitment to backing innovative, digitally agile companies in India, particularly those dedicated to financial inclusion and promoting green initiatives.

Arohan Financial Services
MFI in India

FMO signed a LCY equivalent of a USD 25 million Non-Convertible Debentures with Arohan Financial Services Ltd. in India. Arohan is an existing FMO PE client and part of the Aavishkaar Group, in which FMO has been invested in for more than 15 years. Arohan is a valued new addition to FMO’s FI debt portfolio, being an MFI that provides loans and other financial inclusion related products to low-income households with limited or no access to financial services. It is mostly active in economically less developed regions in India where it serves over 2 million low-income borrowers, mostly females residing in non-urban areas. The allocated proceeds from this four-year facility will be 100% earmarked for microloans (RI) towards women. FMO takes pride in the partnership with Arohan, supporting the company to further grow and increase the access of credit to unserved and underserved rural areas and strengthening FMO’s partnership with a key client with strong track record.  

Dvara Kshetriya Gramin Financial Services
MFI in India

FMO signed a USD 20mln (USD 13mln MASSIF/US DFC and USD 7mln DFCD) transaction through the Indian ECB route, funds which will be used for the growth of Dvara’s microfinance portfolio towards female and/or young microentrepreneurs, women-owned micro enterprises, supporting the themes of gender and inclusive finance, and climate resilient agriculture (100% RI and 25% green for the DFCD portion). Dvara KGFS is a non-deposit taking systemically important NBFC (regulatory category NBFC-ND-SI) headquartered in Chennai, India. The company’s mission is to maximise the financial wellbeing of individuals and small enterprises in India by providing access to financial services. Dvara KGFS uses a customer-centric, technology-enabled business strategy to provide financial products to women and microenterprises in rural /semi-rural areas. It has a network of 378 branches in 107 districts spanning across 10 states in India and targets low-income and unserved and underserved rural/semi-rural populations.

Private Equity

Southeast Asia Clean Energy Fund II (“SEACEF II”)
Low carbon energy transition fund in Southeast Asia

FMO has signed a USD 13.5mln investment in Southeast Asia Clean Energy Fund II (“SEACEF II”), a Southeast Asia-focused fund managed by Clime Capital, combining philanthropic, M/DFI and private sector capital. The Fund provides early-stage catalytic capital to developers and corporates focused on the renewable energy, energy efficiency and e-mobility sectors with the aim of de-risking and crowding in construction equity/follow-on capital from 3rd parties. SEACEF II’s strategy fits FMO’s ambition to support new sectors such as in e-Mobility and energy storage and the development of bankable assets in its focus markets. Given SEA’s low uptake of renewable energy (on average ~15% of generation mix) coupled with a rising population and energy demand, there is a significant opportunity to deploy capital in fast growing, scalable businesses that are critical towards mitigating the growth of carbon emissions in the region. The Fund’s investments are expected to reduce non-RE consumption and greenhouse gas emissions, increase access to energy, improve energy stability and security, and create jobs and opportunities for small and medium-sized enterprises.

Green for Growth Fund
Blended finance fund

FMO signed and disbursed Euro 50 million in A and B shares of Green for Growth fund (GGF).  GGF is managed by Finance in Motion (FiM), an important long-standing partner for FMO. GGF is an impact investment fund that mitigates climate change and promotes sustainable economic growth by investing in measures that reduce energy consumption, resource use and CO2 emissions. The fund, a blended finance structure, is a public-private partnership that leverages risk-capital provided by public institutions with additional private capital to substantially increase investment volumes to regions and sectors that do not normally attract such flows, and is an early and successful example of blended finance in action. The fund channels this dedicated financing to businesses and households through local financial institutions, and through direct investments to eligible green projects and companies. This investment fits well with FMO’s strategic aim to reduce GHG-emissions and to support SDG 13 “Climate Action”.