KENYA – Export Trading Co. (ETG), an agricultural conglomerate connecting smallholder farmers to global markets is set to receive US$100m debt commitment from CDC Group, a British development finance institution and impact investor.
The financing will support the growth of ETG’s food and agriculture business and strengthen its food value chains by expanding its logistic networks, boosting agriculture yields and the production of staple foods such as grains, rice and cocoa.
As part of the funding facility, CDC will support ETG’s ongoing efforts towards implementation and alignment with international Environmental & Social standards with enhanced focus on supply chain risk management, safeguarding work and procedures.
The commodity trader has strong ESG credentials, recently launching a data driven agricultural intensification pilot project in Kenya to improve farmer productivity whilst enhancing the environmental risk management and climate resilience of ETG Kenya’s food staples.
Including this CDC capital commitment, ETG has one-third of the loan book linked with ESG and Sustainability standards.
“We are extremely grateful for the support of CDC Group. ETG is excited to expand its existing presence in various markets and further offer support to communities across our extended footprint,” Anish Jain, Chief Treasury Officer of ETG, said.
ETG has long standing relationships with over 550,000 smallholder farmers across Africa, significantly improving their livelihoods by providing consistent future demand for their produce through access to regional and global markets.
“Agriculture and rural development are vital engines that are accelerating Africa’s economic transformation and meeting global food and health needs.“Tony Morgan – Managing Director & Head of Private Equity and Corporate Debt at CDC Group
Operating a two-way logistics model, the company drops fertilisers at the farmgate – improving crop quality – and then picks up the farmers produce to sell on the global market.
ETG also provides warehousing and distribution centres giving farmers flexibility to store and sell their produce at the optimal time, thereby increasing their income potential substantially.
Furthermore, farmers supplying produce to ETG benefit from training, expert farming support and mechanisation which all lead to significantly improved yields. Its team of agronomists guides farmers on production of higher margin cash crops and crop rotation to ensure year-round stability.
“Agriculture and rural development are vital engines that are accelerating Africa’s economic transformation and meeting global food and health needs. As these sectors continue to evolve and grow exponentially, this shift will be bolstered by a diversified, technologically-enabled, and commercially-oriented agro-industry –one that connects Africa’s markets regionally and internationally.
“We are delighted to deepen our partnership with ETG and look forward to the tremendous impact and economic development that CDC’s patient capital will support,” Tony Morgan, Managing Director & Head of Private Equity and Corporate Debt at CDC Group, said.
At US$100m, the capital provided to ETG marks one of the largest corporate debt investments in CDC history.
The long-term partnership between CDC and ETG brought about by this commitment is a testament to the catalytic role that the agriculture and rural development sector will play in Africa’s next phase of growth, over the next decade.
This commitment also contributes to UN Sustainable Development Goals (SDGs) 2 (Zero hunger) and 8 (Decent work and economic growth).
The recent investment follows Agri Commodities and Finance (ACF), the main trading company of ETG clinching a US$115 million syndicated loan facility from a consortium of Development Finance Institutions (DFIs), to enable it expand its operations across Africa.
The facility was arranged by the Dutch FMO with participation from FinDev Canada and OeEB of Austria.
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