Who is our client
ETC Group (“ETG”) is a large and diversified agricultural commodity trader and supply chain manager with most of its footprint in Africa. Since its establishment in 1967 in Kenya, ETG has emerged into one of the largest independent agricultural commodity supply chain managers in Africa. The Group owns and manages a vertically integrated agricultural supply chain with operations spanning from procurement, processing, warehousing, distribution and merchandising. ETG owns more than 300 warehouses and operates over 70 processing plants. Over the last decade, it has invested over USD 300 mln in supply chain infrastructure in Sub-Saharan Africa.
ETG will use the FMO funds to further expand its logistical infrastructure (warehouses and trucks) and processing capacity (e.g. cashew processing, fertilizer blending) in various (mostly African) countries. More than half of funds will flow to Least-Developed Countries.
Why we fund this project
ETG plays a key role in various agricultural value chains (e.g. cashew nuts, sesame seeds, pulses). In Africa, it uses its own supply chain infrastructure to source over 80% of its agricultural commodities at farm-gate. ETG is also one of the largest importers and distributors of fertilizer in Africa. As such, it plays an important role in enhancing incomes of African farmers. The FMO facility will allow ETG to further invest in supply chain infrastructure and to expand its local processing capacity, adding more local value to African agricultural production.
Environmental and social rationale
Based on Environmental and Social (E&S) risks/impacts and country/regional context the E&S risk category is B+. Main risks for the processing and warehousing by ETG are Occupational Health and Safety and labour risks which are largely limited to the sites and readily mitigatable by good practice. Though generally aware of the risks, the management of supply chain risks is still in its initial phase (e.g. child labour or deforestation). The relevant IFC Performance Standards for this financing are PS1 to PS4 (Management, Labour, Resource Efficiency and Community). For Resettlement (PS5), Biodiversity (PS6), Indigenous People (PS7) and Cultural Heritage (PS8) policies are in place in case these are triggered by new activities or expansions. Management of these issues is safeguarded through PS1, PS3 and PS4 Communities. ETG is committed to international practices and standards. This is reflected in the group integrated management system, addressing risks at Group, country and plant level. The E&S risks mentioned above will be mitigated by the implementation of an Environmental and Social Action Plan.
- Agribusiness, Food & Water
- Signing date
- Total FMO financing
- USD 25.50 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C)