news - Monthly transaction overview March 2023

As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes 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.

Agri, Food & Water

Climate-Smart Agriculture & Food Fund (“CSA Fund”)
Agri-fund focused on Asia Pacific, Latin America, and Africa

The CSA Fund, managed by ResponsAbility, provides long-term financing along with technical assistance to ~20-30 Agri SMEs operating in Asia Pacific, Latin America, and Africa under four investment themes: 1) sustainable intensification of production, 2) value-adding and efficient processing and logistics, 3) sustainable and inclusive retail and food brands, and 4) climate technology and solutions providers. CSA Fund’s financing will target transactions in the Agri space focused on reducing climate change risk and GHG emissions as well as on promoting a sustainable increase in yields. ResponsAbility has 20 years of investment track record as an impact investor and its local presence, to originate, structure, and manage debt transactions. FMO, in the 2nd close of the Climate-Smart Agriculture & Food Fund (“CSA Fund”), signed a USD 21.5mln subscription from FMO-A (USD 17.5mln) and Building Prospects (USD 7.5mln), bringing the total commitment to USD 94 mln.

Ivory Cocoa Products S.A
Cocoa processor in Ivory Coast

FMO signed a EUR 6 mln FMO-A top-up facility for our existing client Ivory Coca Products S.A (“ICP”), continuing our partnership initiated in 2018 with Ivory Coast’s largest independent cocoa processor. The facility provided will support the upgrade of existing production lines of ICP, its working capital needs as well as the installation of solar panels, thus aligning its environmental goals with FMO strategy on climate action (SDG13). The transaction fits with FMO’s strategy to increase value addition in origin countries by strengthening the local coca sector in Ivory Coast while bringing strong E&S additionality with more sustainable sourcing throughout the coca supply chain. 

Kılıç Deniz
Sustainable aquaculture producer in Türkiye

FMO arranged a EUR 60 mln syndicated loan facility to Türkiye’s leading aquaculture player Kılıç Deniz, which grows, produces, and exports sustainably certified fish. Also participating in this transaction are ILX Fund,  an SDG-focused emerging market credit fund in Amsterdam, and Proparco, the French development finance institution. The syndicated facility will be used to finance Kılıç Deniz’s capital expenditures and working capital requirements to expand into a wider range of fish species by investing in new marine fish farms and processing and packaging units in the Black Sea region of Türkiye, further supporting their sustainable aquaculture growth.

Taprobane Seafoods (Pvt) Ltd
Seafood company in Sri Lanka

Taprobane Seafoods is a leading seafood company in Sri Lanka, operating throughout the whole supply chain from early production at hatcheries to frozen and packed end-products for consumers thereby applying modern production, processing and logistics techniques. FMO signed a USD 15mln facility with Taprobane Seafoods to support the sustainable production of vannamei (whiteleg) shrimp. The funding was financed with support of the Dutch Government through Building Prospects and Dutch Fund for Climate and Development. The transaction will help to rehabilitate abandoned shrimp farms, establish renewed hatcheries, and setup eco-friendly processing factories which together provides a necessary boost to the local economy, supports the wider agri-value chain and aids both climate and food system stability. In addition to financial support FMO provided technical assistance to cooperate with the company in becoming ASC certified in the future.

Energy

EnergyVision Ltd
Energy services company in Sub-Saharan Africa

EnergyVision Ltd. is an energy services company that provides energy-efficient, stable and cost-effective energy solutions to telecom towers in Sub-Saharan Africa by replacing diesel generators with a hybrid system of solar panels, batteries and diesel generators. Currently serving 500 towers in Gabon and Nigeria, EnergyVision plans to expand its services to 4,500 sites by 2024. The installation of hybrid systems has resulted so far in about 58% reduction in GHG emissions due to a combination of solar PV generation and implementation of energy efficiency measures. EnergyVision’s core strength is to ensure very high levels of “up-time” of telecom towers, thereby improving connectivity in off-grid and rural areas. FMO, along with Sunfunder and OeEB, will provide a senior secured facility of USD 65 million to support EnergyVision's expansion plans.

Financial Institutions

Mibanco
MFI bank in Peru

On International Women’s Day, FMO announced a loan of USD 50 mln to Mibanco, the largest MFI bank in Peru to provide increased access to finance to women-owned MSMEs across the country. The FMO loan is part of a syndicated transaction together with IFC, which led the transaction and earlier provided up to USD 100 mln in financing. Mibanco focuses primarily on offering products and services to micro and small enterprises, such as credit lines, fixed asset or working capital loans, and financial advisory services programs. Having expanded to becoming the largest MFI bank in the country, FMO’s and IFC’s investment in Mibanco supports financial and market inclusiveness across Peru, allowing women-owned businesses to have better access to products and services custom-tailored to their needs. As such, this transaction meets SDG 10 of Reducing Inequalities, SDG 5 for Gender Equality, and also as SDG 8 for Decent Work and Economic Growth, by supporting entrepreneurship and innovation.

Premier Credit Kenya Limited
Microfinance institution in Kenya

FMO signed a USD 10mln senior term loan with Premier Credit Kenya Limited. The transaction is a B-loan participation following IFC. Premier Credit Kenya Limited is a non-deposit-taking, microfinance institution that has been operating since 2013.  It serves more than 250,000 clients with a focus on micro and small enterprises and civil servants across Kenya.  FMO’s funds will support Premier Credit Kenya to further grow its MSME portfolio, qualifying the facility as 100% Reducing Inequalites. Alongside the funding, FMO is also supporting Premier Credit with conducting a CPP assessment and progressing with CPP certification.

SATYA Micro Capital Ltd.
MFI in India 

FMO signed an INR 2.05 billion transaction with SATYA Micro Capital Ltd. Satya is a medium-sized, fast-growing NBFC-MFI in India that predominantly employs the Joint Liability Group (JLG) model to provide unsecured, affordable microcredit to women borrowers. It caters to almost 1mln borrowers through a network of 338 branches spread across 228 districts in 21 states (as per FYE22). The proceeds will be utilised towards women and youth financing promoting financial inclusion and gender equality and empowerment while 20% of the amount has been earmarked for Water Sanitation Hygiene (WASH) products. Next to financing, FMO provided a Corporate Governance assessment to the company.

Private Equity

Evolution III fund
Sustainable energy-focused private equity fund in Africa

FMO committed USD 30mln to the first close of Evolution III fund (“EVIII”). EVIII is a pan-Africa private equity fund focused on investments in renewable and sustainable energy infrastructure, energy access, and energy and resource efficiency solutions that forge climate-resilient development pathways for Africa’s future. EVIII has a target fund size of USD 400mln and is advised by South Africa-based fund manager Inspired Evolution (IE). FMO’s investment in EVIII builds on our relationship with IE following our commitment to predecessor fund Evolution II and the co-investment in d.light, one of the largest African off-grid players.

Mediterrania Capital IV (MC IV)
North-Africa focused generalist private equity fund

FMO committed EUR 25mln to the first closing of MC IV – the fourth fund managed by Mediterrania Capital Partners (MCP). This is the third fund managed by MCP that FMO commits to, and accompanies FMO’s co-investment with the fund in Laprophan (announced last month). MC IV will target majority and significant minority investments in Mid-Cap corporates operating primarily in North-Africa, with some allocation to Francophone Sub-Saharan Africa. Through providing growth capital to Mid-Cap corporates in its target region, MC IV aims to partner with management teams to support them with scaling existing operations and further institutionalization.

Merensky Timber
Timber company in South Africa

Merensky Timber is the third largest private plantation owner in Africa with a base of 65,000 hectares of pine and eucalyptus plantations (and 19,000 hectares of conservation area) and associated manufacturing assets in South Africa. Merensky Timber is recognized as the pioneer of high value eucalyptus solid-wood logs and lumber, with a history of tree breeding and genetic improvement spanning more than half a century. Merensky supplies a range of FSC-certified forest products to meet the demand of African and global markets. FMO is investing (USD 17.3mln) together with Africa Forestry Fund II, a forestry fund managed by Criterion Africa Partners, a key partner to us in the African Forestry PE Sector. The co-investment will support several value creation initiatives, including a gradual conversion from pine to hardwood-eucalyptus and investment into the sawmills