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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.
Recently, our 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 to invest in developing economies that are already or 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 enable entrepreneurs in developing economies to build a better world and boost resilience to withstand the pandemic.
FMO signed a USD 6 mln term facility agreement with EAT, through FMO-A and our Mobilising Finance for Forests Fund. EAT is forestry company with 1,085 ha of total area in Ecuador consisting of 869 ha planted high-quality teak and a sawmill to produce boards and blocks and is owned by Arbaro Fund, a forestry fund inesting in sustainable forestry in the LAC and Sub-Sahara African regions. EAT intends to expand the existing plantation with another 500 ha, upgrade the sawmill and acquire new machinery and equipment. This is a 100% Green transaction: total project sequestration is ca. of 130,000 tCO2 during the term of our loan. EAT also generates positive social impact by creating jobs, formalizing employment, offering an attractive off-take channel to local teak producers (for the mill) and generating healthier environment with increased connectivity of sensitive habitats.
FMO signed the renewal of a USD 43 mln FMO-led Pre-Crop facility, continuing its commitment to the region in a difficult and volatile geopolitical situation by supporting the company’s farming operations for the next season. FMO’s participation in this facility alongside other partners is USD 24 mln. The transaction is labelled 100% Green, as climate vulnerability studies have shown that Moldova faces severe climate risks, and that those risks will have an impact on the agricultural income of Transoil’s suppliers – smaller farming companies and communities. Alongside the customer, FMO has developed and environmental and social action plan to mitigate the risks of climate change and indirect social risks as well.
FMO has signed a USD 18.6 mln loan to Solarpack Corporación Tecnológica, a multinational Independent Power Producer, to develop, build and operate two PV solar plants with a total installed capacity of 252 MWp in Colombia. The USD 142 mln financing package includes loans from the Inter-American Development Bank and Bancolombia. The projects will increase access to clean and affordable power and contribute to the development of the renewable energy sector in the country.
M-KOPA is a connected asset financing platform that offers millions of underbanked customers access to life-enhancing products and services. Through M-KOPA’s inclusive digital credit model, customers can build ownership over time by paying an initial deposit followed by flexible and affordable micro-payments. The funding relates to a re-investment of an existing USD15mln facility to the client, which will allow the company to continue the growth trajectory of its solar and e-mobility portfolio and provide more products to its customers. The loan is partially denominated in local currency (Kenyan Shillings), making it highly additional.
FMO committed to provide a USD 16.67mln senior secured debt facility to Red Sea Power, the first project-financed Independent Power Producer in Djibouti. This is considered a landmark project given its contribution in assisting Djibouti to secure its own energy supply resources. In addition, as the first IPP it sets the trend for further private sector participation in the Djiboutian power sector.
FMO has signed a USD 50 million senior unsecured facility with XacBank LLC, one of Mongolia’s leading universal banks and a customer of FMO since 2007. The proceeds of the loan will be used to grow XacBank’s SME Loan portfolio with a specific focus towards Women-Owned SMEs. In addition, at least USD 15 million of the entire facility will be used to fund eligible green projects as per FMO Master Green List. With this facility FMO supports XacBank’s pioneering position in green financing in Mongolia. Additionally, the five-year tenor of the loan will strengthen XacBank’s long-term funding base which is key in the current volatile macroeconomic context.
FMO (via Massif) signed a USD 15mln and USD 5mln senior term loan with two new clients, Watu Credit Kenya and Watu Credit Uganda, respectively. Watu is an early stage FinTech company providing financing for motorcycles (boda bodas), which are used as taxis and a source of employment primarily by rural-based youth. Watu Credit started operations in 2015 and has grown quickly, expanding across Africa, with FMO directly financing two of their entities in Kenya and Uganda (LDC market).
Given the nature of Watu’s borrowers, FMO’s facility will be dedicated 100% to youth owned MSMEs. As the first DFI to lend to Watu, FMO has also been additional in supporting them to embrace the Consumer Protection Principles (CPP) and ensure these are embedded across their operations, while also providing technical assistance for an impact survey to ensure they are appropriately serving their target market of underserved rural-based youth.
FMO has signed a USD 125mln senior loan facility with its long-standing client, NMB Bank PLC in Tanzania (LDC market). The transaction was completed together with Proparco, with FMO in the lead, providing USD75mln, and Proparco providing USD50mln. The financing is provided for a 6-year term and will be dedicated for on-lending to MSMEs, agriculture businesses and eligible green loans / projects.
NMB is one of the largest banks in Tanzania and has a strategic focus aligned with FMO’s impact agenda to increase their exposure in the MSME segment, particularly through women-owned MSMEs, with the bank launching the first gender bond in Africa earlier this year. FMO is also supporting the bank with technical assistance to enhance their ESG capabilities and will also be looking to support the bank in establishing a green portfolio.
FMO financed, via the European Financing Partners (EFP), the Co-operative Bank of Kenya with a sub-ordinated loan (USD 7mln). The bank provides an extensive range of banking services including corporate lending, loans to Savings and Credit Co-operative Organizations. The Bank has grown from being the bank of the cooperative sector to catering all segments in Kenya with a large customer base of over nine million using physical (178 branches) and digital channels. The Bank has in recent times adopted a new strategy to transform into a universal bank and thus reach a much wider market including MSME and the financing will support the bank to continue its growth path.
FMO has invested USD 50 mln into Callable Notes issued by our existing client Frontier Clearing Corporation. Frontclear, based in Amsterdam and part of the Cardano family, is a fund issuing guarantees to facilitate access to interbank money markets for emerging market banks. With more stable funding, banks’ balance sheet management improves, allowing them to better support SMEs through the financial cycle. The notes are unfunded and can only be called by Frontclear in case of predefined situations of liquidity shortage. Our subscription is guaranteed by the Swedish Development Agency SIDA, and as such counts toward our mobilizing ambitions.
FMO provided financing to UniBank Panama to support energy transition through green financing, while contributing to the country's sustainable development. It's aimed at promoting renewable energy sources and increasing the support of SMEs and companies. The USD 33.5mln facility will also be used to invest in sustainable development project innovation (such as through agriculture, construction, and transportation). By doing so, UniBank aims to improve the quality of life of Panamanians and strengthen the country's entrepreneurial business culture as it contributes to the environment.
FMO signed a USD 40mln loan with its long-standing partner Sudameris Bank in Paraguay. The loan was part of a USD 110mln syndication led by DEG (USD 40mln) and with Proparco as a co-lender (USD 30mln). Sudameris is a medium-sized universal bank, ranking 4th in the local banking sector in terms of loan portfolio. It offers a wide range of financial products and services, primarily to SME- and corporate clients, with a special focus on agribusiness. With long-term funding largely unavailable locally, the term loan with a 7-year tenor will enable Sudameris to further expand its green loan business segment. FMO’s financing will be on-lend to projects in line with FMO’s green lending criteria, aimed at energy efficiency and renewable energy.
SMEs in Nepal have almost no access to growth capital. The private equity sector is in an infant stage and Dolma Fund Management is the first private equity fund manager in Nepal filling this gap. This successor fund is financed by FMO (through the MASSIF fund), Swedfund, IFC and CDC, with FMO now committing an extra USD 5 mln. Over the next years the fund is expected to finance a portfolio of businesses in healthcare, renewables, and tech. In addition, Dolma II has signed an MOU for the 2X Challenge to increase opportunities for women in Nepal.
MASSIF committed USD 10mln to private equity fund AFMF at first close. AFMF is the third fund raised by Emerging Markets Investments Advisers (“EMIA”), and experienced manager in the region and existing relationship of FMO. The fund will follow a sector-agnostic strategy and invest into SMEs and early-stage companies primarily active in Cambodia and Laos. This commitment allows FMO to keep supporting a trusted partner active in countries where there are limited PE teams with on-the-ground presence and local knowledge. The Fund will provide scarce equity financing to local entrepreneurs while supporting them through non-financial value-add in areas such as training, governance, expansion strategies, and labour practices.
FMO committed USD 20mln to private equity fund Lok Capital IV at first close. It is the fourth India-focused private equity fund raised by long-standing FMO relationship Lok Capital. The Fund combines a focus on growth equity investments in more traditional financial services and FinTech companies with investments in earlier stage deals in the AgriTech, HealthTech, and ClimateTech space. In line with its predecessor funds, Lok IV will make investments in private companies in India, with inclusion-themed investments in the FI sector making up the core of the portfolio.
FMO disbursed USD 20mln in local currency equity investment in its existing customer NeoGrowth in a D-round of investing. With this equity boost, the company is ready to further increase their loan book and provide this market segment that has difficulties with getting loans from banks. NeoGrowth provides unsecured loans to smaller SMEs all over India that generate a major part of their revenue digitally, where most of these loans will be repaid by the MSME on a daily base. For PE-FI this is the first investment in a FinTech, as this has primarily been done through the Ventures Team.