The United Kingdom’s Development Finance Institution and impact investor, CDC Group has announced a KSh. 10.6 billion (US$100 million) debt commitment to ETG, a Kenyan agricultural conglomerate.
The debt commitment will support the growth of ETG’s food and agriculture business, and it will help ETG strengthen food value chains by expanding its logistic networks, boosting agriculture yields and the production of staple foods such as grains, rice and cocoa.
In a statement, CDC Group says the investment, which aims to support over 550,000 farmers in Africa by improving crop yields and farmers’ livelihoods, marks one of CDC’s largest corporate debt investments in its 73-year corporate history.
Commenting on the deal, Tony Morgan, Managing Director and Head of Private Equity and Corporate Debt at CDC Group said, “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.”
On his part, Anish Jain, Chief Treasury Officer of ETG, said, “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. ETG puts special focus on the development of smallholder farmers, linking them with international markets by utilizing its proprietary end-to-end supply chain.
CDC Group has investments in over 1,200 businesses in emerging economies and a total portfolio value of $6.2bn.
This year, CDC aims to invest up to KSh. 187 billion ($1.75 billion) in companies in Africa and Asia with a focus on fighting climate change, empowering women and creating new jobs and opportunities for millions of people.
ETG, which was established in 1967, has a presence in 48 countries, spanning 5 continents. 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.Furthermore, farmers supplying produce to ETG benefit from training, expert farming support and mechanization, 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
