CDC Group, the UK’s development finance institution and impact investor, has announced a US $100 million (Ksh10 billion) debt commitment to ETG, the agricultural conglomerate connecting smallholder farmers to global markets through its operations in 48 countries worldwide.
The debt commitment will support the growth of ETG’s food and agriculture business and strengthen food value chains by expanding its logistic networks, boosting agriculture yields and the production of staple foods such as grains, rice and cocoa.
At $100 million, the capital provided to ETG marks one of the largest corporate debt investments in CDC history. ETG has long standing relationships with more than 550,000 smallholder farmers across Africa, whom it helps to significantly improve livelihoods by providing consistent demand for their produce through access to regional and global markets.
Operating a two-way logistics model, ETG drops fertilisers at the farm gate – 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.
This commitment marks one of CDC’s largest corporate debt investments.
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.
ETG has strong ESG credentials, and recently launched a data-driven agricultural intensification pilot project in Kenya to improve farmers’ productivity while enhancing the environmental risk management and climate resilience of ETG Kenya’s food staples.
“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.
Given CDC’s focus on ESG frameworks, this facility marks a solid achievement for ETG to further strengthen its supply chain and mitigate risks in its operations. Including this CDC capital commitment, ETG has one-third of the loan book linked with ESG and sustainability standards.”
Tony Morgan, Managing Director & Head of Private Equity and Corporate Debt at CDC Group, said agriculture and rural development are vital engines accelerating Africa’s economic transformation and meeting global food and health needs.
Access to Markets
“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,” said Mr Morgan.
Emma Wade Smith OBE, Her Majesty’s Trade Commissioner for Africa at the UK Department for International Trade, said: “Improving access to markets for Africa’s farmers is critical to food security, across the continent and the world. It is also essential to sustain and improve the livelihoods of Africa’s farmers and their families.”