news - Monthly transaction overview – November


Monthly transaction overview – November

December 7, 2020

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 just over 50 years in empowering people to employ their skills and improve their quality of life. 

Our recent focus has been on business continuity in the wake of the COVID-19 pandemic. 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.

Financial Institutions

Ameriabank CJSC
Largest universal bank in Armenia
FMO’s long-standing client Ameriabank issued a Green Bond in EUR for the equivalent of USD 50 million, marking a milestone in the local financial market as the first-ever Green Bond project in Armenia. The Green Bond is structured in accordance with internationally recognized ICMA Green Bond Principles (the GBP). The debut Green Bond is issued in close cooperation with FMO, which is also the anchor investor in the transaction. For more details, see the press release.

Kompanion Bank CJSC
2nd largest bank in rural outreach in Kyrgystan
FMO has signed a USD 7 mln (USD 3mln committed + USD 4 mln uncommitted tranche) senior unsecured loan with Kompanion, a longstanding client of FMO since 2013 and the second largest bank in terms of rural outreach in Kyrgyzstan. This facility provides Kompanion a buffer as uncertainties are still high due to the Covid pandemic. The transaction contributes to job creation in rural areas. The loan will be disbursed either in local currency or in USD. FMO is providing flexibility to the client in these challenging times: in addition to Covid, Kompanion had to deal with a political crisis which erupted in Kyrgyzstan in the middle of contracting process, which has luckily stabilized in the meantime.

United Liwwa for SME Finance
Online lending platform for SME financing in Jordan and Eqypt
FMO signed an JOD equivalent of USD 1 million senior debt facility to United Liwwa, a subsidiary of FMO’s Venture Program client Liwwa Inc. The facility, financed from MASSIF funds, will be used to lend to the un(der)served SMEs in Jordan. United Liwwa is uniquely positioned given its unmatched speed, technology and agility to traditional group of SME lenders – banks, and to a lesser extent Microfinance Institutions. Through its proprietary marketplace, retail investors can participate in the unsecured SME. Liwwa blends marketplace funding with financing from partner banks (both on- and off-balance sheet) and impact lenders. Its operations started in March 2015, and since then managed to grow its assets under management to USD 11 million. Liwwa Inc. is currently expanding its lending operations into Egypt. Although the facility amount is small, providing this debt facility is another key addition to the package FMO offered to Liwwa supporting it to weather the challenging COVID-19 circumstances.

JSC Bank of Georgia
Increasing an existing Tier 2 facility
FMO has mobilized USD 10 mln subordinated debt from ResponsAbility for Bank of Georgia.  Bank of Georgia is a longstanding client of FMO since 2006 and the second largest bank in Georgia.  By closing this secondary transaction, FMO support Bank of Georgia’s capital position and is greatly additional during these challenging Covid pandemic.  Strengthening capital now, provides a buffer for unforeseen events during uncertain times and positions the bank well for the ‘after-Covid’ times.  This transaction adds to the USD 107mln syndicated subordinated debt facility closed in 2019.  FMO continued conversations with impact investors which resulted in this increase and second close. This transaction shows the value of FMO’s extensive partnership network which brings valuable capital to our customers during the Covid pandemic.

Locfund next
Microfinance Institution debt fund in Latin America
FMO signed a senior loan of up to USD 20 mln with Locfund Next, a new MFI debt fund launched by fund manager Bolivian Investment Management (BIM), with whom FMO has a long-standing relationship. Locfund Next is the follow-on Fund of Locfund I and Locfund II, in which FMO has also invested through the MASSIF fund. Similar to these previous funds, Locfund Next will focus on providing local currency finance and technical assistance to Tier II and Tier III microfinance institutions in Latin America. We consider BIM a strategic partner in progressing financial inclusion in LAC and supporting microentrepreneurs, particularly during an economic recession in a region where approximately 40% of the workforce has informal employment.

Banesco Banco Multiple
Small universal bank in the Dominican Republic
FMO closed a USD 12mln senior unsecured debt facility for Banesco Banco Multiple in the Dominican Republic. The facility has a five year tenor and will be directed to SMEs. Banesco has a strong focus on SME financing: 29% of loan portfolio and a key segment for growth for the bank. The Dominican Republic has a stable economy with a good country risk, but still faces important challenges in terms of job creation, financial inclusion and poverty. Although the Covid-19 crisis has hit the country hard in some key economic activities (i.e. tourism and exports), Banesco has shown stable performance during the pandemic and has continued supporting its SME clients, while increasing investments to accelerate its digital transformation. Besides contributing to our SDG 8 by supporting SMEs, our loan is highly additional as it is provided in local currency (synthetic), strengthening Banesco’s funding structure with stable long tenor funding in Dominican Pesos, thanks to the hedge provided by TCX.

Banco Promerica Guatamala
Mid-sized universal bank in Guatamala
Together with our partners BlueOrchard Finance Ltd, responsAbility Investments AG and FMO Investment Management, we were able to support our client Banco Promerica Guatemala with a syndicated loan up to USD 55 mln. Banco Promerica will use the mobilized funding to finance SMEs and green projects in Guatemala. The bank is part of the Promerica Group, a long-standing strategic partner for FMO.

Banco Promerica El Salvador
Mid-sized commercial bank in El Salvador
FMO signed an USD 30 mln (USD 20mln committed plus USD 10mln uncommitted) Senior Loan Facility with Banco Promerica in El Salvador. Employing more than one-third of El Salvador’s workforce and generating nearly half of the country’s gross domestic product, SMEs play a critical role in the country’s economic stability. Promerica El Salvador is one of the leading banks in the country which has carved out a niche for itself in understanding the need of the SME’s and providing customized financing solution. Through this investment, FMO reiterates its support to the SME sector and empowerment of financial inclusion.

Private Equity

ZIZ Energie
Mini-grid company in Chad
FMO signed an EUR 500k convertible note to ZIZ Energie (ZIZ), a privately-owned integrated power company in Chad. A leading player in the energy industry, ZIZ provides energy access to Africa’s 5th-largest country, which currently has just a 10% electrification rate. FMO is providing development equity for the local entrepreneur’s mini-grid projects through the FMO Ventures Program. The investment is part of a EUR 2 mln convertible round in a co-investment with Energy Access Ventures (EAV) and marks the start of a larger investment round that aims to allow ZIZ to scale its operations and improve green energy access to households and smaller businesses in secondary towns across the country. For more information, see the full press release.

African Infrastructure Investment Fund 3
Energy and infrastructure fund in sub-Saharan Africa

FMO committed USD 11mln as a top-up investment in African Infrastructure Investment Fund 3 (AIIF3). Managed by African Infrastructure Investment Managers (AIIM), AIIF3 is an energy and infrastructure fund focused on sub-Saharan Africa, where FMO has been invested since first close in 2017. FMO's investment is part of a USD 80mln capital increase, bringing the total fund size to USD 400mln and FMO's total commitment to USD 46mln. Infrastructure development is a critical enabler for productivity and sustainable economic growth, and with this investment FMO continues to address the market need for infrastructure across sub-Saharan Africa in a sustainable and responsible manner. FMO also maintains its support of partner AIIM in a challenging fundraising environment as this top-up enables the fund to deploy additional capital into a strong pipeline of impactful assets.

Agribusiness, Food and Water

Netafim Agricultural Technology Ltd
Irrigation system provider in China
FMO signed a USD 4.9 mln IFC led syndicated facility to Netafim (Guangzhou) Agricultural Technology Ltd, as part of the Netafim Ltd IFC syndicated transaction. Netafim is the world’s largest provider of micro-irrigation systems to large- and small-scale farmers. Micro-irrigation is a crucial tool to enhance food production while saving scarce resources as water and land. Netafim will use the loan proceeds to gain a stronger foothold in Africa, where there is enormous growth potential for drip irrigation, and to further expand in China.

NL Business

Colsen International
Biogas plant in South Africa

FMO’s Development Accelerator program co-finances the feasibility study for a biogas plant in the Western Cape in South Africa. Aquest Colsen is the South African subsidiary of the Dutch Colsen International B.V., and has for this assignment teamed up with a South African developer of energy projects, MBH Energy, as well as South African engineering firm Kainos Projects Africa. Astral is foreseen to provide the feedstock for the plant and to be one of the major off-takers. It will use the biogas to heat the stables at around 30 chicken farms, allowing them to become less dependent on unreliable electricity supply as well as reducing their CO2 footprint. Another potential partner is Quantum, with around 20 chicken farms in the vicinity of the plant.

Pan African Internet Exchange Indigo B.V.
Data center operator in Africa
Pan African Internet Exchange (PAIX) is a Dutch company that sets up and operates data centres in Africa (currently: Ghana and Kenya). FMO NL Business provided EUR 300,000 repayable development capital to cover 50% of the costs for a feasibility study for setting up a data centre in Ivory Coast. Data centres contribute to local economic development by making more data available and as such reducing the unit costs. The current COVID crisis shows that for response purposes, the availability of reliable data is crucial for various solutions, such as e-health.

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