Project detail - ETC Group

Who is our customer?

ETC Group (“ETG”) is a diversified agricultural conglomerate that has a diverse portfolio of expertise across various industries, encompassing agricultural inputs, chemicals, logistics, processing, food and food ingredients, energy, metals, technology and supply chain optimization. ETG has built its business by linking small-holder African farmers to a diverse pool of global buyers and efficiently managing this value chain. It started operations in 1967 in Kenya by distributing and marketing products manufactured by multinational companies in the country to East Africa and has since diversified operations globally (45 countries spanning 6 continents) with most operations still centred around Africa.

What is our funding objective?

The funding objective is to support a structured de-risking programme (ECOSHIFT Phase 2) to test and validate the agronomic, operational, and commercial feasibility of producing dedicated woody bioenergy crops grown by smallholder farmers as a replacement for coal used in ETG’s edible oil and agro-processing operations. The end-state is a bankable model that can be scaled across ETG’s operations and contracted farmer networks, with long-term offtake arrangements that provide predictable farmer income diversification and improved climate resilience through regenerative practices and agroforestry systems. The support aims to generate decision-grade evidence to move the concept toward an investable business case for DFCD Aya Land Use Facility (LUF). Specifically, FMO's funding is used to finance the technical design, implementation and testing of the biomass outgrowing model, including demo plot establishment, smallholder planting support, seedstock and nursery development, harvesting/chipping trials, community engagement activities, a scale up roadmap as well as well as dissemination of learnings. Our contribution/investment is supported through the Dutch Fund for Climate and Development – Aya (DFCD Aya) facility, co-funded by the European Union, to mobilise investment in climate-resilient sectors and nature-based solutions, supporting sustainable development under the Global Gateway strategy and Team Europe Initiatives.

Why do we fund this investment?

The project pilots a scalable smallholder-based woody biomass supply chain that reduces coal-related emissions while integrating farmers into a formal outgrower model with access to inputs, training, and guaranteed off-take. This enables more inclusive participation in structured value chains and more stable, diversified income streams for these smallholder farmers. Furthermore, it also enhances the resilience of rural communities and ecosystems by promoting regenerative agroforestry practices on underutilised or fallow land, improving soil health and reducing pressure on crop residues, natural vegetation, and forests. This directly contributes to FMO’s Climate Action Plan priorities on low-carbon transitions and resilient land use systems. It also aligns with DFCD Aya TA objectives by strengthening inclusion and improving environmental and social conditions at farm level and addressing key constraints such as limited income diversification combined with high exposure to climate shocks for vulnerable communities.

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