Project detail - BANGLADESH MANAGED ACCOUNT CV

BANGLADESH MANAGED ACCOUNT CV

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Who is our client

Through Bangladesh Managed Account CV, FMO will invest in ACI Motors, a market leader in the distribution of agricultural machinery in Bangladesh, and the sole distributor/manufacturer of Yamaha motorbikes in the country. The Company was formed in 2007 with a vision to increase farm mechanization, and is a subsidiary of ACI Limited, a larger conglomerate with interests in pharmaceuticals, consumer goods and agribusiness.

Funding objective

FMO’s investment will be used to replace bridge financing raised to build a local manufacturing/assembly plant and to provide working capital for the Company’s financing scheme for agricultural equipment. FMO will thus support access to mechanization for farmers and help ACI Motors increase local value creation in the motorbike segment.

Why we fund this project

Bangladesh is experiencing significant labour shortages during peak harvesting season, and mechanization can play a key role in increasing yields and improving farmer income. ACI Motor’s financing scheme provides access to agricultural equipment. The creation of a local assembly/manufacturing plant supports job creation and leads to import substitution. FMO’s investment is thus expected to contribute to economic growth and reducing inequalities, and indirectly to zero hunger. Additionally, the investment will be done with a new partner in Bangladesh, SDI. In executing this investment, FMO is supporting SDI in its development as a potential fund manager in Bangladesh, thus supporting the PE market in the country.

Environmental and social rationale

E&S category is B+ (medium) as the project has limited social and environmental impacts, which are site specific and mitigatable through well know and available measures. An external consultant has supported FMO in conducting E&S DD. For the project, IFC PS 1-4 are applicable. PS 5-8 are not applicable as the company is the freehold owner of the land for the project, it had never been developed prior to acquisition, and there were no ecologically sensitive receptors, indigenous people or structures of archaeological importance in the surroundings of the site.

Region
Asia
Country
Bangladesh
Sector
Agribusiness, Food & Water
Signing date
8/11/2020
Total FMO financing
USD 14.8 MLN
Fund
FMO
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)
B+