By Staff Reporter
In an effort aimed at supporting sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs, the Dutch entrepreneurial development bank and the leading impact investor, FMO has invested in developing economies that are already or expected to be hit hard by the Covid-19 pandemic and those recovering.
In a statement, FMO highlighted its confidence that a strong private sector leads to economic and social development and has a 50-year proven track-record of empowering people to employ their skills and improve their quality of life.
As one of the larger bilateral private sector developments banks globally, FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.3 billion spanning over 85 countries.
“These months, we focus on business continuity and recovery in the wake of the COVID-19 pandemic. It is precisely now, during these times of crisis, that it is important to continue to invest in developing economies that are already or expected to be hit hard by the pandemic.
“While local governments are working hard to minimize the impact on their people and economies, we are needed now more than ever. Hence, we continue to empower entrepreneurs in developing economies to build a better world and boost resilience to withstand the pandemic,”the statement reads.
FMO supported Africa Finance Corporation, a Pan-Africa financier of infrastructure projects, financial institutions, industry and natural resources projects with the loan expected to contribute to development of the African infrastructure whose current state continues to be an important impediment to sustainable economic growth on the continent.
It provided a USD 60 mln senior loan facility as part of a total USD170 mln facility of a 12-year tenor, co-funded with DEG and Proparco. The loan facilitates finance to mainly long-term infrastructure projects and private sector clients.
AFC is a multi-lateral African financial institution, established in 2007 and an existing client since 2012. It is active in 30 African countries and its primary objective is to provide long term finance for infrastructure.
FMO also supported Alliance Finance Co. PLC an MSME Asset-based financier as it signed a 5-year USD 10 mln senior secured Loan Facility with Alliance Finance Co. PLC. Based out of Sri Lanka, Alliance is primarily a MSME asset-backed financier, with a strong focus on vehicle financing for productive purposes.
Alliance has a high ambition on contributing to the SDGs by improving living standards of marginalized households and rural areas through inclusive financial products and services, and support of development of MSME entrepreneurs and self-employment opportunities.
“The USD loan will be swapped into local currency by the client and will be used to provide funding for Alliance’s expanding MSME portfolio. As most of the leases provided by AFC are issued to microentrepreneurs, the transaction contributes to reducing inequalities in Sri Lanka,” said FMO.
FMO signed a high-impact transaction of USD 100 mln with JSCB Hamkorbank, the largest privately-owned bank in Uzbekistan. HK focuses primarily on Micro, SME, and retail customers and entrepreneurs with (non-)financial products and services. The funding will be used to finance eligible Reducing Inequalities projects (50%) as well as Green projects (50%).
When it comes to Agribusiness, Food, and Water, FMO committed USD 62.5 mln in an FMO-led USD 82.5 mln syndicated facility to Tiryaki Agro, one of Turkey’s leading agricultural commodity traders and supply chain managers. The syndicated facility will refinance the DFIs’ existing loan while increasing and extending the commitment to continue supporting the company with the working capital needed for its agribusiness operations worldwide.
FMO participated for up-to USD 25 million in a 1-year working capital facility with other financial institutions towards Trans-Oil Group, a Logistics provider in Moldova and Ukraine.
It is a leading vertically integrated farming, oilseed crushing, trading and transportation logistic provider with operations in Moldova and Ukraine. The funds will be used to finance Trans-Oil Group’s purchases of agricultural commodities from third parties until their export from Moldova.
FMO extended the partnership with the Largest African Health NGO, Amref for three years with a focus on jointly developing business models that (i) provide access to the health system or (ii) induce health seeking behaviour.
“At the same time, we signed an agreement to provide development capital to the WaterStarters consortium which includes AMREF which is setting up a franchise model for providing drinking water to rural and peri-urban communities in Kenya.
“The latter is an example of the projects we are developing under the partnership. Besides better health and in the case of WaterStarters access to clean water, these projects are also a major contributor to reducing inequalities, within the communities through a gender lens and to kindle economic development.
FMO signed a EUR 483,500.- repayable development contribution agreement with an innovative hydro power turbine test in the Philippines Dutch company Bluecap Bustos B.V., a joint venture between Bluecap Hydro B.V. and HTSM Venture Fund B.V.
“The funds will be used to co-finance the feasibility study and project demonstration of a micro-hydropower plant in existing stop-locks in the irrigation canals of the National Irrigation Administration (NIA) of the Philippines, near Bustos.”
FMO indicated that the aim was to provide off-gid energy to run irrigation pumps and provide post-harvest value-added activities such as drying and cooling of produce.
“After the successful demonstration, the roll out is expected to be phased, starting with up to 15 locations initially, and potentially leading up to 300 locations in the second roll-out phase.”
By Staff Reporter