news - Monthly transaction overview July

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Monthly transaction overview July

August 4, 2022

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

Agrocorp
Global commodity trader and processing company
Agrocorp, specialized in various commodities such as pulses, wheat, rice, oilseeds, sugar, cotton, and edible nuts, has a  strong presence in several Least Developed Countries (LDCs), supporting food security (SDG2) by moving food from surplus areas to deficit areas. Agrocorp also contributs to SDG 10 by providing farmers access to markets, liquidity, inputs, and services. Agrocorp and FMO signed a 3-years USD 25m increase on top of the existing USD 25m facility. FMO’s borrowing base facility is mostly used for origination and distribution activities that require aggregation and storage of inventories. More than half of the trade flows (51%) financed by FMO concerns commodities that are either sourced or sold in LDCs.

HPW
Dried fruit processor
HPW is market-leader in the upcoming dried fruit processing industry in West-Africa. In its factories in Ghana and Ivory Coast the company dries mango’s and other fruits, many of which would otherwise go to waste as the aesthetics are not appealing enough to be exported as fresh product, thereby providing year-round employment to more than 2,000 employees and supporting over 1,500 smallholder farmers (including in neighbouring Burkina Faso). FMO provides HPW with an EUR 6mln Building Prospects loan. Our loan will be used to support the growing working capital needs of the business and support the company with moving into fruit snacks (bars, rolls etc.).

HSA Yemen
Yemen's largest food conglomerates
The nutrition in Yemen has deteriorated from an already precarious situation because the invasion of Ukraine. To help HSA buy basic food commodities and cope with the soaring prices on international markets, FMO is providing an additional $20mln loan facility, led by IFC. We lend to six food-manufacturing companies, members of the HSA Group, including two flour-mills, a sugar refinery and two dairy plants. The funds will be used to prepay for basic-food raw materials such as milling wheat, raw cane-sugar and dry (powdered) milk.

Energy

AEE Power Ventures, S.L.
Pan-African power developer
FMO signed a USD750.000 Repayable Development Contribution to AEE Power Ventures, funded by the Access to Energy Fund. The facility will be used in the early development phase of the ESSOR Mini-Grid Project in the Democratic Republic of the Congo (DRC), which aims to improve access to electricity in isolated cities by means of hybrid solar mini-grids implemented under long-term concessional structures. The project will implement three independent mini-grids in the cities of Bumba, Gemena and Isiro (each with a population of over 150k people). FMO will contribute to part of the external development costs incurred by AEE-PV, including amongst others technical and feasibility studies, as well as E&S advisors.

Financial Institutions

Bai Tushum Bank OJSC
Mid-sized commercial bank in Kyrgyz Republic
FMO signed an USD 10 mln senior Term Loan with Bai Tushum Bank, a medium sized universal bank who focuses on Micro, SME and Retail customers in the Kyrgyz Republic, and FMO’s client since 2012. The 4 year funding line consists of a committed tranche of USD 2 mln and an uncommitted tranche of USD 8 mln. The loans will be made available in local currency KGS or USD. Bai Tushum Bank will use the new funding in line with FMO’s aim to Reduce Inequalities by means of on-lending the proceeds to a combination of Micro customers and Women / Youth / Agriculture SMEs.  

Bank Respublika OJSC
Mid-sized commercial bank in Azerbaijan
FMO signed an USD 20 mln senior Term Loan with our long standing client since 2006, Bank Respublika, a medium sized universal bank who focuses on Micro, SME and Retail customers in Azerbaijan. FMO’s funding line has a tenor of 3 years and will be made available in local currency AZN. Bank Respublika will use the funding in line with FMO’s aim to Reduce Inequalities by means of on-lending the proceeds to eligible Women, Youth, Agriculture SMEs and Micro entrepreneurs in the country.

Lendable MSME Fintech Credit Fund
Debt financing vehicle (SICAV-RAIF) in Luxembourg
FMO, through MASSIF, has signed an additional USD 5mln commitment for the Lendable MSME Fintech Credit Fund, helping fund manager Lendable as such to catalyse additional (commercial) investors such as Allianz and JICA, ahead of the fund’s final close in Aug-22. This will allow Lendable to reach the targeted USD 100mln fund size. FMO co-anchored this high-impact debt fund which closed in 2021 through a USD 5 mln investment in the mezzanine tranche. The fund’s first close reached USD 46.75 mln via commitments from leading impact and DFI investors from both Europe and the US. The fund is providing senior secured debt financing to young Fintech companies that provide credit to underserved MSME’s in emerging and frontier markets in Africa and South-East Asia. MASSIF’s investment will contribute to SDG’s 8 and 10.

NeoGrowth Credit Private Limited
FinTech lender in India
NeoGrowth is an innovative FinTech lender that started operations in 2014 and provides loans to MSMEs based on underwriting of digital payments data. The company realized a robust growth of the portfolio in recent years, catering to 20,000 clients. NeoGrowth’s end clients are (first generation) entrepreneurs who are excluded from the formal banking sector because of a lack of prior credit history or inability to provide collateral. Finally, the FMO loan facility will be directed to financing the Micro part of the portfolio. FMO signed a senior secured USD 10 mln bilateral facility in local currency (INR) to NeoGrowth, funded from FMO-A.

Private Equity

Algebra Ventures Fund II
Venture Capital Fund in Egypt
Algebra Ventures is one of the most experienced VC investors in Egypt and trough their new fund, they will continue to support technology start-ups with access to finance and talent, driving innovation and job creation primarily in Egypt and a limited allocation to the Middle East and Africa. FMO  signed a USD 10m commitment to Algebra Ventures Fund II (“AVF II”). FMO’s investment will bring AVF II to a USD 82.9m fund size out of the targeted USD 90m. In addition to FMO, who is investing through the FMO Ventures Program, other investors include the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).

 

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