KENYA – The Export Trading Group (ETG), a Kenya-based agricultural commodities trader, is raising US$80 million (Sh8 billion) to finance and boost its operations in Africa.
ETG, which trades a wide range of commodities, including maize, pulses and fertiliser, seeks to utilise the funding to improve its grain exports as well as fertiliser imports, reports Business Daily.
The International Finance Corporation (IFC), an international financial institution, has committed to inject US$40 million (Sh4 billion) in funding while the London-based Standard Chartered Plc is expected to finance the remaining capital.
“The proposed project involves the second renewal of the existing funded risk-sharing facility with Standard Chartered Bank for a trade finance facility of US$80 million to support ETG agri-commodity trader’s export of cash and food grains, storage, and import of fertiliser in sub-Saharan Africa.
“IFC’s investment amount will be up to US$40 million,” ” the global financier said in its investment disclosures.
The project will support the purchase, storage and sales of agricultural commodities and fertiliser mainly in mainly in East, southern and West Africa.
ETG will invest in Malawi, Benin, Kenya and Tanzania among other A sub-Saharan African countries.
The IFC said that the trade finance facility, which enables global businesses to improve their operations by removing various obstacles including payment and supply risk, would help connect farmers to value chains, among other benefits.
“The renewed facility is expected to continue having the following development impacts: support of commodity trade finance for importers/exporters in emerging markets.
“Increased access to trade finance for critical commodities, especially in the agro-commodity sector in an emerging market.
“Improved market integration by facilitating intraregional and south-south trade for commodities and enhancing the connectivity of real sector firms into value chains,” the institution said.
Commodities financed by the project are bought from smallholder farmers and sold to wholesalers, co-operatives, NGOs and governments in various low-income African countries and in the international market.
Established in 1967 in Kenya, ETG has operations in 40 countries including over 25 African countries, as well as in India, China and South East Asia where it buys, stores, processes and/or manufactures finished goods.
The company has additional trading and merchandising desks in Europe, the Americas and the Middle East.
The multinational employs more than 7,000 people globally. Its major shareholders are Ketan Patel, Mahesh Patel and Pradip Patel family trust and institutional investors Pembani Remgro (South Africa) and Mitsui & Co Ltd of Japan.
