news - Monthly transaction overview – May

Counter cyclical investments

In this month’s transaction overview, FMO focuses on the support provided to clients and partners that are suffering from the impact 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 which 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.

Agribusiness, Food & Water

Agrocorp International
Supply chain company focused on South- and South-East Asia

The COVID-19 pandemic has challenged food supply chains globally and especially in developing markets in Asia, the Middle East and Africa where the disruption from lockdown measures have led to reduced food production and rising prices. In order to increase Agrocorp International’s ability to provide food to consumers in these countries, FMO and Rabobank have signed a USD 50 million committed sustainable borrowing base facility with them. For more information, see full press release.

Trans-Oil Group
Farming, oilseed crushing, trading and transportation logistic provider in Moldova

FMO leads a group of five commercial banks to invest a total amount of USD 32mln in TOI Group. This counter-cyclical loan is meant to pre-fund TOI’s farming activities on more than 70,000 hectares with the expected harvest of 250,000mt of grain to be exported to countries of the Middle East.

Zalar Agri
Fruit producer in Morocco

FMO’s first investment (EUR 11mln) in the Moroccan agribusiness sector will support job creation and spur export-led economic growth in rural Morocco. Zalar Agri owns 1,370ha of fruit orchards (apples, mandarins, avocados, pomegranates, dates, etc.) in various regions of Morocco and currently produces around 12,000 tons of fruits per year. This volume is expected to double with the help of our financing as the fruit orchards will mature and expand. The investment will contribute to SDG 2 by increasing the production and sales of healthy and safe fruits that are ultimately consumed in LMICs.

Anadolu Etap
Producer and processor of fruit concentrate in Turkey

Together with EBRD (European Bank for Reconstruction and Development), we financed 50 percent of a EUR 60mln term facility for Anadolu Etap. The company operates a green and sustainable integrated value chain of plantations for fruit production, cold storage warehouses, and processing facilities in Turkey. EBRD and FMO have provided working capital to improve the company’s maturity profile and help weather the impacts of the COVID-19 pandemic.

Financial Institutions

COFINA
Microfinance group in Senegal and Ivory Coast

FMO provided multiple transactions to microfinance group COFINA to support the lending to women and youth-owned businesses, in countries where nearly half the population still lives below the national poverty line. Compagnie Financiere Africaine (COFINA) received funding from the Dutch government fund MASSIF: EUR 7,5 mln is issued to COFINA’s subsidiary in Senegal, EUR 5 mln to Cofina Côte d'Ivoire. For more information, see full press release.

Vitas
Microfinance company in the Palestine Territories

Vitas’ mission is to support unbanked people by providing them the financial resources needed to support their economic activity and improve their level of income. The COVID-19 outbreak makes counter-cyclical investments even more important, to foster economic development in vulnerable regions. FMO provided a USD 5 mln loan from Dutch government fund MASSIF. For more information, see full press release

Hamkorbank
Private bank in Uzbekistan

One half of FMO’s USD 40mln credit line to Hamkorbank will be used to finance greenbusinesses, and the other 50 percent will be targeted at reducing inequalities by financing i.e. women, youth, agri and micro businesses. This loan expands FMO’s longstanding relationship with Hamkorbank. On top of being the leading private bank in Uzbekistan, Hamkorbank can differentiate themselves as a green bank and expand their business opportunities

Banco Promerica de Costa Rica
Privately owned universal bank in Costa Rica

This longstanding client asked FMO to repurpose USD 10mln of its funding to support SMEs that need liquidity as a result of the COVID-19 crisis. As a condition to receive financing, these SME will be required to maintain their workforce. Originally, FMO’s funding (USD 30mln, signed in 2019) was meant for the financing of green buildings.

JSC Credo Bank
Microfinance institution in Georgia

FMO closed a five-year GEL 30mln loan agreement with Credo Bank to support micro, small and medium sized businesses with primary focus on agriculture finance and young entrepreneurs in response to COVID-19 impact. For more information, see full press release.

Early Dawn Microfinance (DAWN)
Microfinance company in Myanmar

FMO provided a USD 7.5 mln local currency loan to DAWN to weather the impact of COVID-19 on its MSME clientele. The crisis brought rapid disruptions across Myanmar’s economy, including in the microfinance sector. Repayment deferrals in combination with debt service obligations and ongoing operational costs severely limited the lending capacity. FMO’s funding enables DAWN to continue supporting their microfinance clients in the current difficult environment.

Ipak Yuli Bank
Mid-sized financial institution in Uzbekistan

After signing a USD 15mln (in LCY) 5 year senior loan in February, FMO signed a new USD 5m (in LCY) 2 year senior loan this month serving as a liquidity buffer against the impact of COVID-19 for Ipak Yuli Bank’s customers. The funding attracted through the new loan will be used by Ipak Yuli Bank in line with FMO’s Reducing Inequalities objective to finance eligible women, youth, agri and micro entrepreneurs in the country.

Armeconombank
Mid-sized financial institution in Armenia

FMO’s new funding facility of USD 15mln with a tenor of 5 years enables Amerconombank to continue supporting its customers with new loans in times of heightened economic stress. The funding will partly be used to finance eligible green projects and two-thirds will be targeted towards eligible Reducing Inequalities customers (women, youth, agri SMEs and micro entrepreneurs). Besides long term funding, FMO provides non-financial support and knowledge exchange in the areas of Corporate Governance and Green finance.

Private Equity

The Coremar Group
Maritime and port service provider in Colombia

Coremar was allowed to continue operating despite the lockdown in Colombia due to the essential services it provides (e.g. facilitating grain imports). Nonetheless, port activity did decline to circa 70% of 2019 levels, and the return to target levels is expected to be gradual. FMO’s recent capital injection in the Coremar Group, though not significant in size (USD 456.000), sent a strong signal to the market and financiers of FMO’s ongoing support during difficult times and is expected to unlock further debt funding and critical working capital.

African Development Partners III
Pan-African private equity fund

FMO committed USD 25m in the ADP III fund, which is targeting to build a diversified pan-African portfolio of 17 companies across vital industries such as agri‐business, banking, consumer lending, pharmaceuticals, higher education, logistics, quick serve restaurants, packaging, etc The diversified scope of the fund will ensure that COVID-19 does not highly affect the risk profile of the fund. ADP III is uniquely positioned to take advantage of attractive investment opportunities in the market and help bolster African economies in these unprecedented times.

NL Business

Eastern and Southern African Trade and Development Bank (TDB)
Financial institution based in six countries

A 12-year export finance loan program of EUR 40mln will be used for financing the acquisition of Dutch sourced capital goods. The aim of this program is to enable African enterprises to procure Dutch goods and services at attractive funding conditions. For more information, see full press release