news - Monthly transaction overview – June

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. 

In this month’s transaction overview, 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.

Agribusiness, Food, and Water

Agrofértil
Supplier of farm inputs and technical assistance in Paraguay
FMO signed a USD 18 million loan with Agrofértil, a company that plays a key role in the agricultural value chain of Paraguay by providing agricultural inputs on credit to farmers. Furthermore, Agrofértil provides commercialization services to help farmers to sell their grains efficiently. The company’s agronomic advisory services enable farmers to increase their productivity and profitability. FMO’s funding will help the company to increase its stable working capital base and to finance its recent investments in its grain silo network.

Nibulon 
Grain and oilseed producer and exporter in Ukraine
FMO provided USD 20 mln working capital to finance the continuation of Nibulon’s operations in purchasing and trading grains and oilseeds. This spring was hot and dry which resulted in a very early grain harvest in Ukraine. Additionally, with the pandemic, European banks have been cautious. This is why Nibulon asked DFIs like FMO to help secure emergency funding. During the pandemic, the company donated ~USD 1.5 mln for equipment and hospitals and plans to spend USD 2 mln more. For more information on the building of this hospital, watch this video.

Financial Institutions

Amret
Microfinance Institution in Cambodia 
Amret has been FMO client since 2006 and, since then, FMO has provided a range of products including equity, senior, subordinated, and syndicated loans. As a result of the Covid-19 crisis, Amret was confronted with savings being withdrawn by depositors. This in combination with the measures Amret is taking to support its clients through these difficult times, there was a need for emergency liquidity. Together with IFC, FMO provided a USD 25 million 1-year facility with an option to extend with another year. 

Eastern Bank Limited 
Universal Bank in Bangladesh
FMO and DEG signed a USD 40 mln Friendship Facility transaction with Eastern Bank Limited. FMO’s USD 20 mln will be fully utilized towards SME or Green investments, supporting the efforts of the country to create jobs for the approximately 2 mln people entering the labor force every year as well as to combat climate change. Additionally, the transaction contributes to the reducing inequalities target for 100% as Bangladesh qualifies as a low-income country. Actiam has also participated in the transaction with USD 3 mln. Despite the uncertainty pertaining Covid-19, this transaction shows the strong commitment of both DEG and FMO to support a long-standing partner. 
 
I&M Bank Rwanda
Financial institution in Rwanda
A USD 25 mln credit facility was provided to I&M Bank Rwanda, the second-largest bank of the country. FMO’s facility will be partially used to finance the bank’s renewable energy portfolio, and partially to support SME’s. I&M Bank Rwanda is a new customer for FMO. Through this transaction, we strengthen our relationship with the I&M group which has banks in Kenya and Tanzania (which are existing FMO clients).  

Eco.business Fund II Sub-Fund
Debt fund providing green finance in Sub-Saharan Africa
Eco.business II Sub-Fund is an open-ended debt fund that aims to promote ecologically sustainable businesses, with a special focus on fighting deforestation in Sub-Saharan Africa, through the provision of dedicated financing and technical assistance. The fund is managed by long-standing FMO partner Finance-in-Motion. FMO will invest in Senior Shares (USD 10 mln committed + USD 10 mln uncommitted). The funds will be on-lent to local financial institutions that target sustainable businesses/projects (i.e. certified or identified as green). Besides, the Fund looks to set up strategic partnerships with commodity buyers to finance smallholders and also to finance high impact projects directly. Priority sectors will be sustainable agriculture, fishery, forestry, and tourism.

Private Equity

Africinvest IV
Pan-African private equity fund
FMO committed USD 30m in Africinvest IV, participating in the fund’s first closing of EUR 202m in June 2020. 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. 

Komaza Group Inc.
Forestry company in Kenya
FMO signed a USD 7.5 million investment in Komaza Group Inc., as part of a USD 20 million Series B round with Novastar Ventures East Africa Fund, AXA, and the Land Degradation Neutrality Fund. Komaza is a forestry company designed to get Kenyan smallholder farmers out of poverty and to address a large and fast-growing wood market in Africa. FMO’s investment is funded by the Dutch Fund for Climate and Development (DFCD). For more information, see the full press release.

Jhimpir Power (Private) Limited (JPL)
Wind project in Pakistan
Together with consortium partners JCM Power from Canada and the Danish IFU, FMO signed the Share Purchase Agreement for the acquisition of a 50 MW wind-powered generating facility located in the Jhimpir Valley, Pakistan, which has been operational since March 2018. The JPL Project has been developed by a Dubai-based company engaged in renewable power development focusing on both utility-scale and distributed generation strategies.

Nilphamari
PV Solar in Bangladesh
Together with Scatec Solar, FMO is developing a PV Solar plant in Northern Bangladesh. With only 3% of its energy coming from renewable sources, the country needs help to achieve its 2030 goals. FMO signed a USD 2 mln top-up to an existing commitment of USD 2.8 mln from the Dutch government’s Access to Energy Fund for the further development of the project in line with our ESG practices.

Innoviti Payment Solutions
FinTech company in India
FMO Ventures Program has committed USD 5mln to Innoviti Payment Solutions, which provides digital payment systems to MSMEs in India. The company processes around USD 6.5 billion of merchant payments annually, or around 5% of India’s total electronic PoS (credit/debit card terminal) sales. Initially, the SBI-FMO Fund participated in the Company’s Series B fundraising round in 2017. Since then Innoviti’s revenues have grown 2.5x. For more information, see Times of India.

Validus
Online platform for SME financing in Southeast Asia
FMO has topped up its original USD 5mln investment in Validus with a USD 1.08mln (EUR 1mln) new commitment from the FMO Ventures Program. Validus owns an online platform for SMEs to secure short term and medium-term financing, sourced from individual and institutional lenders. It operates in Singapore, Indonesia, Vietnam, and most recently in Thailand and has so far enabled ~USD 340mln in SME financing. It is an award-winning and rapidly growing fintech that we hope will enable and support many more SMEs and entrepreneurs in Asia. For more information, see Tech Crunch. 

NL Business

Alinea International Pty Ltd
Health Care developer with Dutch consortium partners 
FMO signed a Development Accelerator Facility agreement with Alinea International Pty Ltd. This project aims to provide international healthcare that is accessible for all and to train skilled staff. The business model focusses on high-quality commercial health services, which are foreseen to cross-subsidize the quality of care for the bottom of the pyramid. NL Business will make up to EUR 323,860 available to conduct a feasibility study of a 400-bed teaching hospital in Dhaka, Bangladesh.