news - Monthly Transaction Overview - July

NEWS

Monthly Transaction Overview - July

August 19, 2024

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 enabling people to employ their skills and improve their quality of life. Every month we provide an overview of our new investments, which can be seen below.

Financial institutions

TBC Bank - Leading financial institution in Georgia

FMO and TBC Bank have signed a NASIRA portfolio guarantee to support underfunded entrepreneurs in Georgia. Co-funded by the European Commission, NASIRA is one of FMO’s most innovative programs which aims to support access to finance for local MSMEs by sharing the credit losses of loan portfolios. The USD 30 million partnership reflects TBC’s and FMO’s shared commitment to strengthening Georgia’s inclusive economic growth. As the largest MSME lender in Georgia, TBC has been actively bringing innovative financing solutions for MSMEs on the market. The proposed risk-sharing facility will further scale up TBC’s ability to finance Georgian MSMEs with a focus on young entrepreneurs, start-ups, women owned businesses and rural businesses, who face the most challenges in accessing funding.

 

Helios Climate, Energy Access, and Resilience Fund (CLEAR) - Africa-focused climate fund

The Helios Climate, Energy Access and Resilience Fund (CLEAR) is a new franchise active on the African continent since 2004. It is focused on climate and adopts a climate first lens which targets the dual benefits of mitigation and adaptation by investing in African businesses across key themes such as green energy solutions, climate smart agribusiness, green transport and logistics, climate enablers, and resource efficiency. The fund aims to become the largest Africa-focused climate fund with a target size of $400 million. Given its commitment to align fully with the MDB principles on adaptation and mitigation, we are pleased to label it as 100% green. FMO has committed USD 20 million through a combination of Building Prospects (USD 10mln) and DFCD (USD 10mln) funds, in the total amount of USD 183mln with other investors (British International Investment, European Investment Bank, Allianz Global Investors, Swiss Investment Fund for Emerging Markets. 

FirstRand Bank Limited (FRB) - Financial services group in South Africa

FMO has signed a NASIRA Guarantee facility with our longstanding and strategic client FirstRand Bank Limited (FRB) in South Africa. This NASIRA portfolio guarantee supports FNB (the commercial and business banking outlet of FRB) in growing its risk appetite for MSME entrepreneurs targeting segments of underserved customers, many of who are facing inequalities, are marginalized groups, or meet the requirements for the Black Economic Empowerment (BEE). South Africa scores highest on the GINI index, listed as the most unequal society in the world.  While FNB is active in the townships, most MSMEs are outside of its risk appetite due to their informal nature. This USD50mln (in LCY equivalent) NASIRA facility allows FNB to expand its lending to MSMEs in townships and is a great example of how we can have impact at scale working with a large universal bank.

Société Générale Madagascar (SGM) - Largest credit institution in Madagascar

FMO and Société Générale Madagascar have signed an agreement to strengthen the private sector in providing solutions for energy supply in the country. As the inaugural Green Bond for Madagascar, this transformative transaction is expected to contribute to the mitigation of climate change and is entirely funded in local currency, making it even more additional and non-distortive for the financial markets. FMO’s USD 10mn (in local currency equivalent) subscription to SGM’s Bond issuance, together with partners IFC/Proparco for a total of USD 39million, is aligned with MASSIF’s focus, strategy, and investment criteria. Notably, the fixed income security also contributes towards the development of local capital markets.

Oromia (Coopbank) - Bank in Ethiopia

FMO and the Cooperative Bank of Oromia (Coopbank) have signed a NASIRA loan portfolio guarantee marking a significant economic and social milestone for Ethiopia. With this guarantee, Coopbank can increase its lending to perceived high-risk entrepreneurs, helping to bridge the financing gap for MSMEs, of which only 6% currently have access to finance. This USD 10 partnership is set to empower agricultural, youth, and women-owned micro, small, and medium-sized enterprises (MSMEs), a demographic typically underserved by traditional banking. By extending funding to these groups, the agreement promises to enhance financial inclusion and stimulate economic growth in rural areas, where Coopbank already has a substantial presence. This initiative, supported by the European Commission, is the first of its kind in Ethiopia and represents a critical step towards the country's economic recovery and development.

Access Bank Plc - Banking services leader in Nigeria

FMO has signed a syndicated facility with existing client Access Bank Plc in Nigeria, aimed at significantly strengthening the capital base of Access Bank Plc, and expected to be allocated equally to specific MSMEs (50%) and general SMEs (50%), thereby counting with 50% towards our Reducing Inequalities label. Access Bank Plc has been a longstanding partner bank of FMO (since 2003) when the Bank was (#) 65 in Nigeria. Over the years, AB has become Nigeria's leading Bank (#1). The USD 295 million transaction is a syndication led by FMO (USD 86 million) and partners (BIO, BII, FinDev, FinFund, Norfund, Swedfund, Blue Orchard, Oikocredit and Privium). In addition to the syndication, FMO will support Access Bank with technical assistance in their YouThrive Initiative.  FMO’s support will serve to train around 52,000 entrepreneurs, out of which 80% women.  This TA is provided through the NASIRA program; a guarantee we provided a few years.     

JSC Credo Bank - Financial institution in Georgia

JSC Credo Bank is a Georgian bank with a wide regional outreach via more than 80 branches and specialized products serving the needs of Georgian MSME businesses. JSC Credo Bank and FMO have signed a USD 13 million NASIRA portfolio guarantee, enabling them to expand its funding to small agricultural, youth, and women-owned companies. As job creation is critical in Georgia, providing small loans to typically “high-risk” groups will support MSME clients to start and expand their businesses, offering a means of income for themselves and their families. 

Crystal - Microfinance organization in Georgia

Crystal provides access to finance for Georgian micro businesses, especially in rural areas. This mission is in alignment with MASSIF’s focus and strategy of inclusive financial systems. This is also a step towards the consolidation of our existing relationship, as FMO first worked with Crystal in 2017. The USD 15mln facility will help Crystal support more entrepreneurs across the country, with FMO’s expanded technical assistance facility expected to help enhance the company’s banking transformation. The local currency loan is split into a committed tranche of USD 10 million and an uncommitted tranche of USD 5 million, to benefit Crystal’s over 112,000 customers, in the region of Kutaisi. As Crystal aims to transform into a microbank, this funding will support their growth and competitive position, focusing on rural, agricultural, women, and youth customers, contributing to SDG 8 and 10, and supporting the de-dollarization process in Georgia.

Transoil Group (TOI) - Agro industrial group in Moldova

Transoil Group is a vertically integrated agro-industrial group based in Moldova with operations in Moldova, Romania, Ukraine, and Serbia. TOI focuses on origination, trade, logistics of grain and oilseeds as well as on the processing of oilseeds into vegetable oil and meal. With its unique distribution and export network and crushing facilities in Moldova as well as strategic port facilities over the Danube River and into the Black Sea region, it is continuously growing in impact. FMO renewed its USD 25 mln participation in an annual pre-export facility led by ING to finance the purchase of agri-commodities for export.  FMO's participation was important as an anchor investor and instrumental in raising capital in the syndicate, a reassuring sign to commercial participants as the general tendency in the region is one of dimishing funding.