news - Monthly Transaction Overview September


Monthly Transaction Overview September

October 9, 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. Every month we provide an overview of our new investments.

Agri, Food & Water

Trans Oil Group
Agro Industrial Holding in Moldova

FMO together with BP, DFCD and Proparco (via EFP framework) signed $31mln facility with Trans-Oil Group to finance its working capital needs for the origination of commodities from Ukraine, continuing our commitment to the region in a difficult geopolitical situation. Russia’s war on Ukraine led most commercial banks to reduce their working capital funding to the region, resulting in a financing gap. The combination of DFIs (FMO/Proparco in this case for 2.5 years) and of public funds (BP/DFCD for 5 years) plays a crucial and additional role in the market. The new financing brings comfort to the existing as well as potential lenders of TOI and will encourage further origination of food commodities from Ukraine. FMO-A participation is $11m, with the rest coming from BP ($7.5 mln), DFCD ($7.5 mln) and Proparco ($5 mln).

Pearl Dairy
Milk processor in Uganda

Pearl Dairy, the largest milk processor in Uganda and the second largest processor in East Africa. Pearl’s core business is procuring raw milk from smallholder farmers, cooperatives, and  traders (2022 total milk processed 110 mln liters) and processing it into various products - UHT milk, milk  powder, flavored milk, yoghurt, butter, ghee, and UHT creamer at its own processing plant in Uganda and at a leased plant in Kenya – which are sold in Uganda, Kenya, and other countries (Malawi, Zambia, DRC, UAE,  India, Japan and others).  FMO closed a USD 17.5 mln senior secured debt facility to the company. This funding is part of a USD 35 mln funding round facilitated equally by FMO and IFC. Pearl will utilize the proceeds of the FMO and IFC loans to (1) more than double its milk processing capacity, (2) expand its milk collection center network across western Uganda, (3) acquire a milk processing plant in neighboring Kenya, and (4) refinance an existing legacy debt facility. This transaction attained a 100% RI label because Pearl (1) makes c.60% of sales via retail channels and (2) 75% of the loan proceeds will be utilized in LDCs.

Financial Institutions

Financial Institution in Armenia

FMO signed a USD 50 million NASIRA portfolio guarantee with Ameriabank, a leading financial institution in Armenia. This partnership is aimed at providing vital support to Small and Medium-sized Enterprises (SMEs) in Armenia, with a particular focus on empowering young and female entrepreneurs. The official signing of the agreement took place in the frames of the Future of Finance 2023 conference in Amsterdam, marking a new milestone in the FMO and Ameriabank partnership. This largest NASIRA facility by FMO in Armenia also includes a technical assistance component, designed to enhance Ameriabank's internal risk management system and improve the services offered to the target groups.

JSC Terabank
Universal bank in Georgia

FMO signed a NASIRA portfolio guarantee JSC Terabank in Georgia for $15 million in local currency equivalent. Terabank, an FMO longstanding client since 2017, provides financing mainly to small and medium entrepreneurs throughout Georgia. The guarantee covers loans to Georgian micro entrepreneurs, with a specific focus on Youth, Women and Agri that will enable the bank to become a niche lender by offering uncollateralized and new products for underserved groups. This is the first ever Nasira transaction in Georgia and it is envisaged that it will also open further the Georgian market for more Nasira transactions as the regulator and other banks get acquainted with the program.

Dashen Bank
Universal bank in Ethiopia

FMO signed a USD20mln senior loan facility to Dashen Bank, a new client in Ethiopia. Dashen Bank is one of the largest private banks in Ethiopia and operating with the largest branch network in Ethiopia serving 3.9mln customers around the country. FMO’s loan, funded via MASSIF, will be used to provide agricultural exporters with scarce foreign currency to import machinery that will enable them to expand operations and thereby increase the number of small-holder farmers that they are working with. FMO’s loan was provided in a club deal with BII and was the first foreign investment ever made into the Ethiopian financial sector following recent changes in the regulatory environment that allow for selective foreign investment. This makes FMO’s loan highly impactful, not only for the bank, but also for the whole financial sector and wider economy as it is setting a precedent that will hopefully stimulate additional foreign investment into the financial sector.

NMB Bank Limited
Leading commercial bank in Nepal

FMO signed its first debt transaction in Nepal - a USD 20 mln senior unsecured loan facility to NMB, our longstanding Private Equity partner in Nepal since 2016. USD 10 mln is funded by FMO-A and USD 10 mln by DFCD. As a leading commercial bank in Nepal, NMB provides various banking services to its customers throughout the country and is committed to sustainable financing. This facility will support the growth of NMB’s MSME and green portfolio.

Private Equity

Joliba Capital Fund I
SME PE fund in Francophone Africa

FMO has made a EUR 15m commitment to Joliba Capital Fund I, a first-time fund raised by Joliba Capital. The fund targets EUR 150 million in fund size and will build a diversified portfolio of 8-10 investments in underserved SME’s operating in consumer-driven sectors across Francophone West- & Central Africa. The fund is set up by Yann Pambou and Hamada Touré, two experienced African investment professionals in partnership with LBO France, an established French private equity firm based in Paris, operating primarily in Western Europe. In Joliba Capital we have found a partner that shares our mission to enable entrepreneurs to increase inclusive and sustainable prosperity. In collaboration with Joliba we expect to promote SDG5 (gender equality), SDG8 (decent work and economic growth) and SDG 10 (reduced inequalities). These objectives are aligned with the mandates of both MASSIF and Building Prospects, which both contribute to this investment (EUR 10 million and EUR 5 million respectively).

Metier Capital Growth Fund III
Generalist PE fund in Africa

FMO has made USD 30m commitment to Metier Capital Growth Fund III (“MCGF III”). MCGF III is the latest fund raised by Metier Capital (“Metier”), a PE firm based in South Africa and a longstanding relationship of FMO (since 2007). FMO previously made commitments to both of its predecessor generalist funds (MCGF I and MCGF II), and its renewable energy funds (MSCI and MSC II). MCGF III is targeting a total fund size of USD 200m and a strong First Close has been achieved at USD 182m. MCGF III will be a generalist fund with pan-African mandate, focussing on key markets in Southern and Eastern Africa. Metier has set ambitious impact targets for MCGF III that are aligned with FMO’s impact goals, notably on Climate and Gender. Climate Action (SDG 13): MCGF III has received FMO’s Green Label, one of the first generalist funds in Africa to do so. Gender (SDG 5): MCGF III will be a 2x Challenge Fund, committing to ambitious gender targets for both the Manager and the fund portfolio companies.

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