- FinDev Canada, FMO, TDB and others join forces in a US$394 million loan to ETG, boosting sustainable agriculture in Africa
- This financial commitment aims to support ETG’s sustainability agenda and its pivotal role in the agricultural sector
Africa—FinDev Canada, Canada’s bilateral Development Finance Institution, FMO, the Dutch entrepreneurial development Bank, TDB, Eastern and Southern African Trade & Development Bank, and other lenders have announced the signing of a syndicated US$394 million Sustainability-Linked Loan (SLL) to ETC Group (ETG) a global conglomerate with a strong foothold in Africa and expertise across various industries.
This significant financial commitment aims to support ETG’s working capital needs across Africa, reinforcing the company’s sustainability agenda and its pivotal role in the agricultural sector.
FinDev Canada will contribute up to US$75 million to the syndicated facility arranged by FMO and TDB.
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In addition to FinDev Canada, FMO, and TDB, other syndication partners include DEG, the German development finance institution, OPEC Fund for International Development, and Proparco, a subsidiary of the Agence Française de Développement Group.
Additional partners include FMO Investment Management and ILX Fund, an emerging market-focused private credit fund.
An SLL is a type of loan designed to incentivise the borrower to achieve specific sustainability performance targets.
Overall, SLLs are a powerful tool for companies to demonstrate their commitment to sustainability while accessing favourable financing terms.
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By collaborating with other DFIs and impact investors, the lenders aim to support and motivate ETG in achieving its sustainability goals, ultimately contributing to a more resilient and sustainable agricultural sector in Africa.
One of ETG’s key targets is to reach one million African smallholder farmers and enhance their production and crop quality.
Established in 1967 in Kenya, ETG has evolved into a global player across various industries. Its focus is on supply chain optimization tailored to local requirements.
With its roots deeply embedded in Africa, the group has made significant contributions to the development of local African economies.
“Despite significant and rapid growth over the years, ETG’s commitment to the African continent remains steadfast. We are humbled to partner with institutions that enable us to truly make an impact in the lives of people whilst keeping a keen focus on addressing pressing issues pertaining to climate change and land conservation. We are enthused to continue this journey and to play our role in creating a sustainable future for generations to come,” said Paul Van Spaendonk, Treasury Chief at ETG.
Fatou Bouaré, Chief Finance and Operations Officer and key account holder for ETG at FMO, said:
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“Few organizations have such a broad influence on African smallholders as ETG, providing them with market access and technical assistance to enhance yield quality. We thank ETG and our investment partners for their trust and cooperation in making this happen. We hope ETG will lead by example, inspiring other multinationals to underpin their sustainability targets with a sustainability-linked loan.”
Michael Awori, Trade and Development Business Chief Executive at TDB.
“TDB is pleased to serve as co-arranger alongside FMO, as well as facility agent on this groundbreaking sustainability-linked loan for ETG, a longstanding client of the Bank. Since 2016, the Bank has financed over US$350 million via several types of facilities for ETG, which have served to support food security in the region and accelerate sustainable and responsible practices.”
Paulo Martelli, VP and Chief Investment Officer at FinDev Canada, said:
“This transaction with ETG is a significant step forward in partnering to advance sustainable agriculture in Africa. We’re proud to collaborate with dedicated partners who share our commitment to driving impact and building a more resilient, sustainable food system. Together, we are supporting smallholder farmers and working to reduce the gender gap, driving inclusive growth across the agricultural sector.”
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