BANGLADESH MANAGED ACCOUNT CVStatus: Approved investment
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Who is our customer
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.
What is our 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 do we fund this investment?
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.
What is the Environmental and Social categorization 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.
- Agribusiness, Food & Water
- Effective date
- Total FMO financing
- USD 14.8 MLN
- FMO NV
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)