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 close to 50-year proven track-record of empowering people to employ their skills and improve their quality of life.
These months we focus 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 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.
Minibus taxi leasing company in South Africa
FMO has signed a new USD 15mln mezzanine facility with longstanding client SA Taxi, South Africa’s leading financier to the minibus taxi industry. In March 2020, in response to the COVID-19 outbreak, strict lockdown measures were implemented in South Africa, impacting minibus taxi operators. As a result, SA Taxi provided interim relief measures to support its qualifying clients, who were in good standing. This financial relief provided to customers meant that collections received were significantly lower in the relevant periods compared to pre-COVID-19 numbers, resulting in SA Taxi seeking access to additional liquidity. Our new facility will support SA Taxi withstand the impact that Covid-19 had on its customer base and its cash flows. It also renews our commitment to our longstanding partner and will strengthen SA Taxi’s liquidity levels, while reducing inequalities in South Africa.
Sasfin Bank Ltd.
Universal bank in South Africa
FMO has signed a landmark USD 35mln Nasira guarantee with longstanding client Sasfin – the first bank ever to benefit from FMO’s new flagship product. The bank’s SME drive, genuine focus on financial inclusion, and innovative spirit make it a suitable candidate for Nasira, which will support increased lending to female, youth, migrant as well as Covid-19 affected businesses. Despite its UMIC status, South Africa is one of the most unequal countries in the world. It also has a large and vibrant private sector, which is now struggling with the consequences of Covid-19. The Nasira guarantee is complemented with a ZAR 390mln liquidity facility which will strengthen the bank’s buffers during the coming years.
Solar Home System company in Sierra Leone and Liberia
Easy Solar is an innovative distribution company making energy and financial services affordable and accessible for those with limited access to power in Sierra Leone and Liberia. The company focuses on last mile distribution of smaller sized solar home systems and lanterns on a pay-as-you-go (PAYGO) basis. This month, the FMO Ventures Program closed a USD 1.5m investment in Easy Solar’s Series A for a ~16.4% stake. This transaction is done alongside the Pioneer Energy Investment Initiative (PEII) managed by Acumen. The round unlocks debt financing of up to USD2.2m from SIMA and Trine.
Read the full press release.
Avaada Energy Pvt Ltd:
Independent Power Producer of renewable energy in India.
FMO invested a top-up amount of USD 10m in one of its existing investees, Avaada Energy Pvt Ltd. FMO’s initial investment of USD 25m (alongside DEG, Proparco and ADB) in early 2019 was used to complete construction of nearly 800MW of solar power projects in India and start construction of a strong pipeline. The top-up investment will be used to complete this pipeline of 987MW of under-construction projects and 1.7GW of remaining pipeline projects bringing the total operational capacity of Avaada to 3.6GW by FY22. This additional capacity will assist in reducing power deficit that impedes growth and affects quality of life in India. It will also help diversify existing generation mix by harnessing indigenous resources, reducing dependence on imported fuel and increasing energy security. Energy generated from Avaada’s portfolio will replace traditional fossil fuel based generation and hence avoidance considerable amount of GHG emissions.
Pan-African private equity fund
Last June, FMO committed USD 30m in Africinvest IV, participating in the fund’s first closing of EUR 202m in June 2020. This month, FMO provided a top-up of USD 5m. AfricInvest is a longstanding partner of FMO and one of the pioneers of private equity in Africa, successfully investing on the continent through their North African and sub-Saharan Africa funds for over 25 years. AfricInvest IV aims to make growth-capital investments in mid-cap African companies that are well-positioned in their local markets and are poised to scale up operations as they expand outside their borders to become “regional champions”. By investing in AfricInvest IV FMO can contribute to the economic growth and private equity market development across the African continent.
Providing reliable COVID data points
Cordaid Foundation establishes reliable data points based on the FAIR data principles under the VODAN Africa network. FMO’s funds of EUR 150,000 will be used to establish the first African data points in Ethiopia, Uganda and Zimbabwe and to form a governance structure that warrants further roll-out across Africa. The project is undertaken in collaboration with the Go Fair Foundation and Philips Foundation. The first seven data points have already been established, bringing the availability of reliable COVID-19 reporting for policymaking one step closer. Read the full press release.
Delft Imaging Systems
Artificial intelligence tool for detecting potential COVID-19 patients
FMO signed an agreement with Delft Imaging Systems B.V. to support the implementation of an innovative artificial intelligence tool detecting potential of COVID-19 patients. FMO funds the project with EUR 215,000 via the Development Accelerator Facility. Delft Imaging has developed a cloud-based artificial intelligence solution for COVID-19 screening off a digital thorax image, in cooperation with Thirona. From X-Ray images, an algorithm was developed to screen CT Scan images. The X-Ray solution is now also made ready to include insights from blood samples, which could also allow for detection of other diseases like malaria and tuberculosis. Over 100 health facilities have signed up for the service of which about 80% in low to medium income countries and over 15,000 images have been screened since the launch in April. FMO’s funds will be used to develop the module further (e.g. develop the relevant application) and to onboard the first 100 clinics to the cloud. Read the full press release.