news - Monthly transaction overview April 2024

NEWS

Monthly transaction overview April 2024

May 15, 2024

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. 

Agribusiness, Food & Water

York Timbers Proprietary Limited
Forestry company in South Africa

York Timbers is a well-established forestry company in South Africa that manages over 60k Ha of pine plantations and 30k Ha of conservation areas and is the largest plywood producer on the continent. FMO invested ZAR 350mln (equivalent to USD 19 mln) which will be used to better match the rotation of the plantation to the repayments of the credit facility, as well as to support the company to expand its newly created agricultural division that is focused on tree crops (avocado, macadamia, citrus).

Energy

Afrigreen Debt Impact Fund SLP
Energy focused debt fund

Afrigreen is a senior debt, closed-end debt fund managed by RGreen, an asset manager specializing in energy transition, climate change mitigation and adaptation. Afrigreen will provide medium to long-term financing to promote climate mitigation and GHG reduction investments, mainly focusing on companies (developers) offering energy solutions for the Commercial & Industrial sector. Financing will target projects in Africa, focusing in Central and Western Africa. FMO invested EUR 10 mln.

Financial Institutions

Ardshinbank CJSC Nasira portfolio
Universal bank in Armenia

Ardshinbank is a new relationship for FMO, and a leading bank in Armenia. FMO is providing a USD 20 mln NASIRA Risk Sharing Facility. NASIRA is a financial program supported by the EU and the Dutch Government. Through its controlled risk environment, the NASIRA facility will bolster Ardshinbank's endeavors to expand its MSME portfolio. The facility places particular emphasis on empowering Young and Women entrepreneurs by supporting their income generating business activities, thereby aligning with FMO’s goal in Reducing Inequalities. The NASIRA transaction will support Ardshinbank in achieving its strategic goal of growing its MSME customer base. Despite the significant presence of MSMEs in the country, their contribution is only about 25% of the country's GDP and around 19% of employment, as the sector has limited access to credit. Due to this, MSMEs are fundamental to the overall socio-economic development of the country.

Bank Respublika OJSC
Mid-sized bank in Azerbaijan

Bank Respublika is a mid-sized bank in Azerbaijan focusing on micro, SME and retail customers. With around 1,475 staff members the bank operates a network of 32 branches. The bank is an existing client of FMO since 2006. Bank Respublika will use the new 4-year facility of USD 25m (USD and local currency options) to finance eligible Micro, Youth, Women and Agri customers meeting FMO’s Reducing Inequalities label requirements for 100%.

TBC Bank Uzbekistan
Bank in Uzbekistan, part of the TBC Bank Group

With a loan of USD 40 mln equivalent in UZS, FMO is supporting TBC Bank Uzbekistan for the second time. The loan, provided in national currency, will be used for 70% for microloans for business purposes, and the remaining 30% for green lending. By supporting both the local economy and the green economy in Uzbekistan, this transaction aligns perfectly with FMO’s broader mission of Reducing Inequalities and Climate Action.

VIH Capital Pte. Ltd.
Lending platform in Indonesia

VIH Capital Pte Ltd (“VIHC”) is wholly owned by Validus Investment Holdings, which is a Peer-to-Peer digital lending platform operator for SMEs in four countries across the South East Asia region. It aims to address the significant financing gap faced by SMEs with the purpose to fuel their growth and drive job creation and local economic prosperity. FMO provided a USD 15 mln loan, earmarked for SME financing in Indonesia. VIHC will deploy the funds through the Group’s local platform operated by PT Berdayakan Usaha Indonesia (Batumbu). Considerable part of its loan book is towards rural and youth-owned (under 35y) SMEs.

Private Equity

SA Impact Forestry Fund LP (SAIFF)
Private equity fund dedicated to sustainable forestry in Paraguay

The fund will focus on acquiring low-productivity farmland, suitable for forestation and with limited alternative uses, and converting it into a sustainable FSC-certified, cost-efficient forestry portfolio. At least 25% of the area managed will be reserved for conservation and restoration activities. FMO will invest equity as a limited partner in the fund, thereby supporting the development of an innovative integrated forestry investment model that combines commercial forestry and conservation activities. FMO’s commitment will allow the fund to expand its operational footprint, thereby increasing carbon sequestration, production of sustainable wood, and conservation of natural habitats.

Tide Africa II LP
Venture Capital fund

The investment strategy of TIDE Africa Fund II focusses on Seed and Series A investments in tech(-enabled) and digital companies. The Fund targets ~25 investments and will lead (or co-lead) transactions with initial tickets between USD 2mln – USD 5.0mln. The investment (USD 10 mln) in TIDE II is a strong fit with FMO's objectives to empower entrepreneurs and their local communities, to support innovation, and sustainable economic development in emerging markets and to reduce inequalities. Technology can have a huge transformative impact in Africa, which has a vast untapped source of entrepreneurial energy, but lacks the necessary funding. TIDE II will make an important contribution to closing this funding gap and driving entrepreneurship and growth in Africa.

Yola Fresh Inc
Moroccan start-up in the fresh fruits and vegetables sector

Through our Ventures Program we invested in Yola Fresh (USD 1 mln). The supply chain platform streamlines the fresh fruit and vegetables sector in Morocco and across Africa, building an efficient distribution platform between farmers and retailers, ultimately reducing food waste and improving the circumstances for both smallholders and retailers. Our equity investment supports the company’s operational expenses during its expansion.

 

 

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