Project detail - Agri Commodities & Finance FZ-LLC

Who is our customer

Agri Commodities and Finance (“ACF”) is the main trading company of ETC Group (“ETG”), a large and diversified agricultural commodity trader and supply chain manager with most of its footprint in Africa. ETC Group became an FMO client in 2019. Since its establishment in 1967 in Kenya, ETG has emerged to become the largest independent agricultural commodity supply chain manager in Africa. The Group owns and manages a vertically integrated agricultural supply chain with operations spanning procurement, processing, warehousing, distribution and merchandising. Globally, ETG operates ~120 processing plants and ~460 warehouses.

What is our funding objective?

The syndicated facility of USD 100 mln is an extension for 15 months of the existing working capital loan. The purpose of the loan is to allow ETG to have sufficient liquidity to continue its operations, maintain employment and continue its support to farmers across Africa. A considerable share of ACF’s sourcing is from Least-Developed (LDC) Countries and smallholders farmers.

Why do we fund this investment?

The transaction shows FMO’s continuous support to ETG, which fits with FMO strategy: (i) ETG has a strong presence in several LDCs, (ii) circa 75% of volume of commodities sourced derive from circa 4 mln smallholders and (iii) at the group level, small scale farmers with a farm size of less than 1ha to 10ha represent more than 90% in ETG's supply chain. It also provides various types of agronomic support to its network of smallholder farmers (soil assessment, training in agricultural practices and fertilizer usage, post-harvest services including storage and transportation). As such, ETG is committed to SDG 10 on Reduced Inequalities and the transaction is labelled as 100% “Reducing Inequalities” by FMO. Further, ETG is committed to SDG 13 (climate action) and SDG 2 (zero hunger). ETG is one of the most important suppliers to the world food program across Africa.

What is the Environmental and Social categorization rationale?

Based on Environmental and Social (E&S) risks and impacts and the country and regional context, the E&S risk category is B+. The main risks are linked to the processing and warehousing and are Occupational Health and Safety (OHS) and labour risks largely limited to the sites and readily mitigatable by good practice. FMO has been working with ETG on E&S improvements from 2019 and since then, the company has grown its E&S organization along with E&S capacity, knowledge, and awareness. The main point that remains to be addressed by ETG is related to management of supply chain risks. FMO is also supporting ETG with capacity development funding to develop a supply chain assessment tool.

More investments

Date	Total FMO financing
12/4/2020	USD 70.00 MLN