news - FMO supports sustainable aquaculture through EUR 60 mln syndicated loan to Kılıç Deniz

FMO announced today a EUR 60 mln syndicated loan facility to Türkiye’s leading aquaculture player Kılıç Deniz, which grows, produces, and exports sustainably certified fish. Also participating in this transaction are ILX Fund, an SDG-focused emerging market credit fund in Amsterdam, and Proparco, the French development finance institution. The syndicated facility will be used to finance Kılıç Deniz’s capital expenditures and working capital requirements and further expand their sustainable aquaculture growth.

Kılıç Deniz is a leading global supplier of various Mediterranean fish species (exporting seafood to over 60 countries) that started off as a family business in 1993. They operate an integrated aquaculture value chain, which includes juvenile and fish feed production, fish farming in marine and fresh-water cages, and processing and distributing a range of fish products. Full integration in the value chain, a solid track record and impeccable reputation within the industry, and a diversified portfolio have contributed to Kılıç’s strong competitive advantage.

The company further stands out due to its focus on sustainable practices within the aquaculture value chain, having taken considerable steps to be a leader in climate mitigation and adaptation. This has resulted in their aquaculture activities having been certified by GLOBALG.A.P and the ASC and their carbon emissions measured to be ~40% lower than the industry average. Furthermore, they have an integrated environmental and social (E&S) risk management system in place and have made significant and proactive progress with their E&S Action Plan, further underlining their commitment to SDG 12 of Responsible Consumption and Production and SDG 13 of Climate Action.

Kılıç Deniz has been an FMO client since 2019. FMO arranged a syndicated facility in 2021 for EUR 80 mln, with participation from Proparco. This latest syndicated loan - which adds ILX Fund to the mix - aims to finance Kılıç’s growth plan as they expand into a wider range of fish species by investing in new marine fish farms and processing and packaging units in the Black Sea region of Türkiye.

Pieternel Boogaard, Director Agribusiness, Food, and Water at FMO, said, “We are proud to provide our support to the growth of Türkiye’s leading aquaculture company and to their continuous mission to be one of the most sustainable fish producing companies in the Mediterranean and Black Seas, supplying healthy and nutritious food to a vast number of people around the world. Kılıç Deniz takes its social and environmental responsibility very serious and thanks to their efforts in climate adaptation and mitigation we were able to label this transaction 100% green, making this company a role model for the industry. Kılıç Deniz’s purpose aligns very well with our strategic ambition of Climate Action, while its size allows us to mobilize other investors to join us in this syndicated transaction. We are very happy with the relationship we built with this exceptional company.”

Guidance of the syndication in improving sustainable aquaculture practices has been a crucial factor in making Kılıç a world class sustainable aquaculture company

Hakan Uyanık, CEO Kılıç Deniz,said, “FMO and Proparco syndicated loan has been a great support for Kılıç in the past 3 years where Kılıç increased sales by more than 50% and doubled profits. Furthermore, guidance of the syndication in improving sustainable aquaculture practices has been a crucial factor for making Kılıç to become a world class sustainable aquaculture company. We are very pleased to extend our existing syndicated loan by another EUR 60 mln new loan facility with the inclusion of ILX Fund to FMO and Proparco. The new loan will help Kılıç to continue growing mainly with investments in Black Sea Region and other efficiency increase investments. Other than financing, sustainability in all areas will continue to be a major priority. We are grateful to FMO for the arrangement of the syndication, and we are grateful to all syndication partners for their trust.

Scarlett Carré de Malberg, Deputy Head of Debt Department at Proparco, said, “Alongside FMO, Proparco is very pleased to support again Kılıç Deniz, a major actor of sustainable aquaculture in Türkiye. Supporting the expansion of a local value chain, promoting climate adaptation practices, and strengthening an E&S risk management system, reflects Proparco's 2023-2027 strategy: Acting Together for Greater Impact."

In addition to reaffirming our commitment with Kılıç Deniz and supporting the Turkish agribusiness and food sector, this transaction supports several SDGs. This includes SDG 13 for Climate Action and SDG 8 for Decent Work and Economic Growth, as the investment will support an increase in direct employees in more rural parts of Türkiye. Furthermore, this transaction supports SDG 2 for Zero Hunger, SDG 12 for Responsible Consumption and Production and SDG 17 for Partnership for the Goals through mobilizing additional funds. As we mobilize impact investors, this syndicated transaction clearly exemplifies the Scale aspect of FMO’s 2030 Strategy: Pioneer, Develop, Scale.

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About Proparco

Proparco, a subsidiary of Agence Française de Développement Group, has been working with the private sector for over 45 years for a more just and sustainable world. With an international network of 23 local offices, Proparco works closely with its partners to build sustainable solutions in response to environmental and social challenges in Africa, the Middle East, Asia and Latin America. Proparco benefits from sector-based expertise as well as a wide range of financial solutions tailored to the different stages of business development, notably thanks to its Digital Africa subsidiary, and its Propulse technical assistance offering designed to scale up the impacts and performance of its partners.

Proparco's new "Acting together for greater impact" Strategy 2023-2027 enables, strengthens and amplifies the different ways in which it works with its partners.

For more information, go to: www.proparco.fr/en @Proparco LinkedIn

About ILX

ILX Management is the Amsterdam-based manager of the emerging market focused private credit fund, ILX Fund I. The USD 1.05 billion fund provides institutional investors access to investment opportunities of the development finance asset class, by investing in private-sector loans arranged by Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs). The Fund’s investment strategy benefits from the DFI’s experience of investing in EMs, to deliver attractive risk-adjusted returns for its investors, whilst mitigating ESG risks and delivering positive, direct SDG-related results by investing in loans that contribute to the ILX Sustainability Themes.

About Kılıç Deniz

Kılıç Deniz is a sustainable aquaculture company founded by Mr. Orhan Kılıç in 1993. The company employs around 2500 people in 4 main districts in Türkiye and small operations outside of Türkiye. Muğla and Mersin regions include fish farms, packaging and processing units and polystyrene box production units. Feed factory is also located in Muğla region. Kahramanmaraş and Gaziantep region is the home for rainbow trout facilities. Fresh water fish farms and packaging & processing unit are in that region. Since October 2022 fish farm for salmon trout is operating in Artvin. Kılıç Deniz products are seabass, seabream, trout, salmon trout, meagre in whole and processed forms. 70% of total revenue is from outside of Türkiye. Kılıç Deniz is also one of the main suppliers of juvenile fish to local and international aquaculture companies.