NETHERLANDS – Louis Dreyfus Company, a leading merchant and processor of agricultural products has secured a US$100 million financing facility from the EBRD to facilitate the company’s regional expansion.
The funding will support LDC’s operations in eight countries including Bulgaria, Egypt, Kazakhstan, Poland, Romania, Tajikistan, Turkey and Ukraine and enhance the company’s corporate governance to address the risks of climate change.
The expansion is expected to provide access to LDC’s supply chains to many regional small and medium-sized grain and cotton farmers.
As part of their cooperation with LDC, small farms will also receive training on modern agronomic practices in order to improve the quality of their produce.
The programme will support cross-border trade flows and the expansion of the agricultural commodities market.
The investment will also foster the adoption by LDC of an enhanced climate corporate governance approach in line with the guidelines of the Task Force on Climate-related Financial Disclosures (TFCD).
The guidelines support voluntary disclosure to stakeholders of climate-related financial risk.
This will include the development of new tools for climate-related risk management and climate scenario stress testing of grain harvests in Ukraine and cotton harvests in Turkey.
Sustainable investments have been a major point of focus for the company. In December last year, LDC announced the renewal of its two US$400 million sustainability linked revolving credit facilities (RCFs) for its Europe, Middle East and Africa (EMEA) region.
The transaction completed LDC’s renewal of its three regional RCFs, following North America in May and Asia in August last year, all of which incorporate the same sustainability-linked mechanism linking the RCF interest rate to LDC’s performance in meeting it sustainability targets.
The targets include reduction in four areas; CO2 emissions, electricity and energy consumption, water usage, and solid waste sent to landfill.
According to the agreement, LDC will benefit from an interest rate margin reduction for every year in which it improves its sustainability performance, as validated by an independent auditor.
The European Bank for Reconstruction and Development (EBRD) investment in LDC raises the banks total investmt in the agribusiness sector to €12.27 billion through 729 projects.
In 2019 alone, the Bank invested €756.4 million in 58 agribusiness projects including a €10 million loan to leading Turkish seed company, May Seed to enable the company expand its operations and its research and development (R&D) capacity.