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Highlights

Last year marked our Agribusiness, Food & Water’s first full year of operations, following its establishment as an FMO focus sector in July 2011. We focused on completing the staffing of the team, building our sector knowledge and strengthening relationships with clients and partners.

We also further defined our strategy, both geographically and in sub-sectors. Our primary focus areas are seeds and fertilizers, primary production and farming, infrastructure, such as storage/warehouses and irrigation, commodity and food processing, and trade and distribution (wholesale/retail). The majority of our deals are in Latin America and Eastern Europe, although we plan to become more active in Africa and Asia. With a still relatively small team we will focus on specific agriculture producing and/or processing countries in each region.

Activity in this sector increased significantly in 2012. We participated in 12 new agribusiness transactions, valued at a collective €122 million. We mostly provided working capital or investment capital to our clients, enabling them to invest in storage capacity or to finance their trade flows.

We were mandated lead arranger for a US$110 million DFI facility for Swiss-based agricultural commodity merchant ECOM, financed in collaboration with our partners DEG and Proparco. The loan will help ECOM finance coffee and cocoa operations in a number of low-income countries, including Kenya, Vietnam, Papua New Guinea and Ivory Coast. ECOM also supports farmers by organizing training and certification in sustainable agricultural practices, supporting our ESG objectives.

We arranged US$50 million in funds, mobilizing funds from DEG ($35 million), Proparco (US$15 million) and commercial financier Deutsche Bank (US$5 million) to arrange a loan for Tiryaki, an agricultural trading company in Turkey. The funds will be used to construct a large silo complex where commodities can be held and used as lien in warehouse receipt financing.

A final highlight for 2012 was our second syndicated facility for Argentine agribusiness group El Tejar, one of the world’s largest producers of vegetable proteins. We committed US$30 million and catalyzed a further US$70 million from commercial banks, providing El Tejar with permanent working capital. This deal is in line with our strategy to support global food security as it will help improve yields and efficiency in primary agricultural production – integral to feeding a growing world population.

From a development impact perspective, 2012 was also a successful year. We met our development impact target. Our investments added value to our clients by generating jobs, bringing in new technologies, generating tax revenues and/or having a positive impact on the balance of payment.

In selecting our agribusiness projects, we seek investments that are sustainable and contribute to food security and rural development. We use our knowledge of environmental, social and corporate governance to support our clients in practicing sustainable business. ESG action plans are in place with many of our client in this sector.

New Contracts per region 2011 vs 2012 (€xmln)

 20122011
Africa190
Asia016
Latin America & the Caribbean4326
Eastern Europe & Central Asia3113
Non-region specific290
Total                                122                                  55

Committed Portfolio per region 2011 vs 2012 (€xmln)

 20122011
Africa267
Asia7783
Latin America & the Caribbean179157
Eastern Europe & Central Asia8969
Non-region specific4214
Total                                413                                330

DII New Contracts per region 2011 vs 2012

 20122011
Africa110
Asia010
Latin America & the Caribbean3015
Eastern Europe & Central Asia208
Non-region specific200
Total8133