Project detail - Agri Commodities & Finance FZ-LLC

Who is our customer

Agri Commodities and Finance (“ACF”) is the main trading company of ETC Group (“ETG”), a large and diversified agricultural commodity trader and supply chain manager with most of its footprint in Africa. ETC Group became an FMO client in 2019. Since its establishment in 1967 in Kenya, ETG has emerged to become the largest independent agricultural commodity supply chain manager in Africa. The Group owns and manages a vertically integrated agricultural supply chain with operations spanning procurement, processing, warehousing, distribution and merchandising. Globally, ETG operates around 120 processing plants and approximately 460 warehouses.

What is our funding objective?

The syndicated facility of USD 90 million 2.5-year working capital loan will allow ETG to have sufficient liquidity to continue its operations, maintain employment and continue its support for farmers across Africa. A considerable share of ACF’s sourcing comes from the Least-Developed Countries.

Why do we fund this investment?

ETG plays a key role in various agricultural value chains (cashew nuts, sesame seeds, pulses etc.). In Africa, it uses its own supply chain infrastructure to source over 80% of its agricultural commodities at farm-gate and operates processing plants that create value for the local economies. ETG is also one of the largest importers and distributors of fertilizer in Africa, playing an important role in enhancing incomes of African farmers.

What is the Environmental and Social categorization rationale?

Based on Environmental and Social (E&S) risks/impacts and country/regional context, the E&S risk category is B+. Main risks, which are linked to processing and warehousing, are around operational health and safety as well as labor and are largely limited to the sites and readily mitigatable by good practice. Even though ETG is aware of the risks and has basic mitigation in place, management of supply chain risks such as child labor, deforestation, etc. still needs further enhancement. The relevant IFC Performance Standards are PS1 to 4 (Management, Labor, Resource Efficiency and Community). PS 5 to 8 (Resettlement, Biodiversity, Indigenous People and Cultural Heritage) are not applicable as ETG’s activities are currently not associated with risks and impacts addressed by these PSs. Implementation of actions necessary to meet the requirements of the relevant Performance Standards are managed through ETG’s Management System. Whenever expanding their activities in new areas, the systems and verification practices will ensure these subjects are addressed. The following guidelines are applicable: General IFC EHS Guidelines and sector-specific EHS guideline(s) for Vegetable Oil Production and Processing, Nitrogenous Fertilizer Manufacturing and Phosphate Fertilizer Manufacturing. ETG is committed to international practices and standards. The group has an integrated management system aligned with international standards addressing risks at group, country and plant level. E&S risks will be mitigated by the implementation of an Environmental and Social Action Plan.

More investments

Date	Total FMO financing
6/5/2023	USD 75.00 MLN