FMO has provided a USD 10mln medium-term facility to finance Agrofértil S.A.’s structural working capital needs and increase their capacity to provide pre-harvest financing to farmers in Paraguay. Agrofértil, founded in 1993, is the leading distributor of fertilizers, crop protection products and seeds and agronomic services company in Paraguay, with its headquarters in Ciudad del Este. Through their extensive network of 20 distribution centers of which 14 have storage silos located in industrial zones or rural centers near the major crop regions in Paraguay, the company assists more than 1,800 farmers.
Thanks to the pre-harvest financing and agronomic advice provided by Agrofértil, farmers are able to increase their productivity and profitability. An integral part of this transaction includes FMO support of Agrofértil to develop a verification system to allow them to ensure that they do not commercialize any crops from farms that have been involved in recent significant conversion of natural habitats. Further, this system will be applied to new clients of Agrofértil or existing clients that are expanding their operations.
Agrofértil plays a key role in the agri value chain in Paraguay, supporting small and medium sized farmers and cooperatives. Agribusiness is considered to be the engine of the Paraguayan economy and is the 6th largest producer and 4th largest exporter of soybeans world-wide which contributes to some 23% of the country’s GDP. Through this project, FMO will be enhancing Agrofértil's capacity to provide pre-harvest financing to farmers and will contribute to the further development of agriculture sector, a key pillar of Paraguay's economy.
The company has successfully been identifying and managing the main social and environmental impacts of its operations, and addressing the issues in full compliance with Paraguayan law. All products distributed by Agrofértil, including fertilizers, seeds and agrochemicals have been approved by the Paraguayan authority SENAVE (Servicio Nacional de Calidad y Sanidad Vegetal y de Semillas).
This initiative from Agrofértil is well aligned with FMO’s efforts to support sustainable finance in Paraguay: together with its financial institution clients in Paraguay, FMO initiated a Roundtable for Sustainable Finance – an initiative to provide guidance to Paraguay’s financial institutions on the country’s complex environmental and social dilemmas and to ensure a level playing field regarding the implementation of minimum environmental and social risk management standards.
Suzanne Gaboury, Director Agribusiness at FMO said: “FMO is proud to play a part in increasing the ability of Agrofértil to support farmers as well as supporting the dissemination of agricultural best practices and inputs to farmers and a sustainable operation in Paraguay.”
Jose Marcos Sarabia, President of Agrofértil said “for Agrofértil, it is very important to officially start a long-term relationship with FMO through this credit facility for the financing of the agricultural sector in Paraguay. Within our regional expansion strategy, the relationships with multilateral agencies that invest in the development of our markets of interest, are fundamental and provide a clear support to our operation. We appreciate the trust of FMO in Agrofértil and hope that this transaction will mark the starting of a successful and lasting commercial relationship.”
About FMO
FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 46 years. Our mission is to empower entrepreneurs to build a better world. We invest in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8.9 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. www.fmo.nl
