FMO and TDB Group co-arrange a $600 million sustainability-linked loan facility for ETC Group to strengthen African agricultural value chains

FMO, the Dutch entrepreneurial development bank, and the Trade and Development Bank Group (TDB Group) have co-arranged a sustainability-linked syndicated loan facility for ETC Group (ETG), supporting the company’s working capital needs and its role in enhancing agricultural value chains across Africa.

Initially signed for USD 394 million by FMO, TDB Group, DEG, FinDev Canada, the OPEC Fund for International Development, and Proparco, with FMO Investment Management and ILX Fund as participants, the facility has since expanded to USD 600 million. 

This growth follows FinDev Canada’s increased commitment and the addition of new participants, including the Asian Development Bank (ADB), Cassa Depositi e Prestiti (CDP), Finnfund, Impact Fund Denmark (IFDK), and OeEB, the development bank of Austria.

The financing supports ETG’s operations in Africa and also in Asia through ADB. It includes a sustainability-linked structure, where the interest margin is dependent on meeting specific environmental and social performance targets.

Huib-Jan de Ruijter, Co-CIO at FMO, said, “ETG plays an important role in connecting African smallholder farmers to markets, inputs, and services. Through this sustainability-linked loan, we are supporting a long-standing client in strengthening its financing base while encouraging measurable progress on environmental and social priorities.”

“This transaction also demonstrates how FMO can mobilise capital alongside partners to support sustainable private sector development at scale.”

Michael Awori, TDB’s Trade and Development Banking Chief Executive for the Eastern & Western African Region, said, “We are pleased to continue strengthening our longstanding collaboration with ETG working alongside partners such as FMO, through the extension of this sustainability-linked facility.”

“It allows us to reach those at the heart of Africa’s agricultural transformation, the smallholder farmers, agribusinesses, and traders who are driving regional food systems forward.”

Addressing agricultural challenges in Africa

Agriculture is vital to Africa’s economy and livelihoods, but many smallholder farmers struggle with barriers like limited access to finance, inputs, infrastructure, and formal markets.

The facility supports companies like ETG that connect farmers to markets and provide agricultural inputs, training, and advisory services. This aims to build resilient, inclusive, and sustainable food systems, improve food security, and lower greenhouse gas emissions.

Paul Van Spaendonk, Chief Treasury Officer at ETG, said, “Despite significant and rapid growth over the years, ETG’s commitment to the African continent remains steadfast. We are proud to partner with institutions that enable us to truly make an impact in the lives of people, whilst keeping a keen focus on addressing pressing issues pertaining to climate change and land conservation. We are enthused to continue this journey and to play our role in creating a sustainable future for generations to come.”

Strengthening agricultural value chains and food security

The facility strengthens agricultural value chains by connecting smallholder farmers to regional and international markets. 

Financing key commodities like grains, pulses, oilseeds, and fertilisers stabilises food supplies, boosts farmers’ incomes, and promotes the inclusion of women and youth in rural economies.

Leadership perspectives

Pauliina Halonen, Senior Investment Manager at Finnfund, said, “This investment in ETG is closely aligned with Finnfund’s strategy and priorities. Agriculture is one of our key focus sectors because it plays a critical role in creating jobs, strengthening food security, and supporting sustainable economic development in emerging markets.”

“Through ETG’s extensive presence across agricultural value chains, we can help improve market access for farmers, increase productivity and resilience, and promote more sustainable agricultural practices. We believe this investment has the potential to generate both meaningful development impact and long-term commercial value, while contributing to more inclusive and resilient food systems.”

Søren Peter Andreasen, Deputy CEO of Impact Fund Denmark, stated, “Agriculture employs millions of people across Africa, but too much value is lost when farmers lack access to logistics, financing, and markets. ETG addresses this challenge at scale. What makes this investment particularly compelling is that the loan incentivises ETG to increase its support for women farmers, expand its advisory services, and reduce deforestation.”

Isabel Chatterton, ADB Director General for Private Sector Operations Department, quoted, “ADB is helping smallholder farmers in India and Viet Nam adopt more sustainable production practices, access certification and fair market opportunities, and build resilience to climate risks through this financing.” 

“Our partnership with FMO, other development finance institutions, and ETG demonstrates ADB’s commitment to building inclusive and climate-resilient agricultural value chains across Asia and the Pacific, while expanding opportunities for smallholder farmers, particularly women.”

Sabine Gaber, CEO and Member of OeEB’s Executive Board, said, “We are pleased to renew our partnership with ETG, a longstanding client and key player in strengthening agricultural value chains across Africa. This financing will help secure access to essential food commodities, support local businesses and farmers, and contribute to economic resilience in the markets where ETG operates.” 

“The transaction closely aligns with OeEB’s strategic focus on sustainable private sector development, strengthening economic infrastructure and industry, and deepening our engagement in Africa, where we aim to create lasting development impact through responsible investments.”

The new facility has already exceeded several impact objectives related to deforestation and reforestation, as well as the number of farmers, including women, receiving extension services. It has also bolstered intra-African agricultural commodities trade flows.