IDH FARMFIT FUND B.V.
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Since its inception in 2008, the Sustainable Trade Initiative (“IDH”) has developed a market-based approach to smallholder value chain development. Currently, IDH works with over 600 companies, financial institutions, producer organisations, and governments in 12 value chains across 40 countries worldwide. As an evolution of its grants-based investments strategy, IDH established the Farmfit Fund (the “Fund”). To strengthen smallholder value chains and improve the livelihoods of farmers, the Fund will support a wide variety of actors ranging from traders to input providers, Agri SMEs and financial institutions across Africa, Asia, and Latin America.
What is our funding objective?
The Fund will offer tailor-made financial instruments (debt, risk sharing, equity) and TA to a wide range of investees that sustainably engage with smallholder farmers. Its impact is further increased through leveraging commercial bank finance.
Why do we fund this investment?
FMO will play an instrumental role in showcasing the viability of farmer finance. A dedicated team of investment professionals will focus on structuring and executing farmer finance deals. The team will be able to capitalize on IDH’s long track record in supporting smallholder value chains across the globe. FMO is additional in this project for several reasons: (1) Whereas the other investors focus on cash crops globally, FMO’s scope will include food crops in Africa thereby allowing the Fund to support projects with a high inclusivity level; (2) FMO will open its network of financial institutions and Agri corporates to the Fund; (3) With regard to ESG Additionality, FMO will support the Fund with the further development & implementation of its E&S Risk Management system.
What is the Environmental and Social categorization rationale?
The Environmental and social risks of the transaction have been classified as category A due to the broad portfolio of potential investees with different level of risks including business activities with potential significant adverse environmental or social risks and/or impacts that are diverse, irreversible, or unprecedented. The fund counts with dedicated E&S capacity, ESG risk frameworks appropriate to manage E&S risks. Although the fund will finance activities to strengthen smallholder value chains, their portfolio is exposed to supply chain risks, contextual, and legacy risks, and biodiversity risks, which must be managed in a manner consistent with all IFC Performance standards (IFC PS 2-8). The transaction includes an Environmental and Social (E&S) Action Plan with the objective of strengthening and supporting the implementation of the fund’s Environmental and Social Management System (IFC PS 1).
More investments
| Date | Total FMO financing |
|---|---|
| 12/22/2020 | EUR 5.00 MLN |
- Country
- Global
- Sector
- Agribusiness, Food & Water
- Publication date
- 8/17/2020
- Effective date
- 12/22/2020
- Total FMO financing
- EUR 5.00 MLN
- Funding
- Building Prospects
-
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) - A