The CDC Group, the UK’s development finance institution and impact investor, has announced a $100 million debt commitment to ETG, an agricultural conglomerate to support the operations of smallholder farmers across Africa and Asia.
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.
Currently, the ETG has a long-standing relationship with over 550,000 smallholder farmers across Africa, and the debt commitment will help significantly improve their livelihoods as it connects them to regional and global markets.
“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” said Anish Jain, chief treasury officer, ETG in a statement.
“ETG puts special focus on the development of smallholder farmers, linking them with international markets by utilizing its proprietary end-to-end supply chain,” Jain said.
“Given CDC’s focus on ESG frameworks, this facility marks a solid achievement for ETG to further strengthen its world-class supply chain and mitigate risks in its operations,” he added.
As part of the funding facility, CDC will support ETG’s ongoing efforts towards implementation and alignment with international Environmental & Social standards with an enhanced focus on supply chain risk management, safeguarding work, and procedures.
ETG has strong ESG credentials, recently launching a data-driven agricultural intensification pilot project in Kenya to improve farmer productivity whilst enhancing the environmental risk management and climate resilience of ETG Kenya’s food staples.
Commenting also, Tony Morgan, managing director &head of private equity and corporate debt at CDC Group, said that 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,” he said.
“We are delighted to deepen our partnership with ETG and look forward to the tremendous impact and economic development that CDC’s patient capital will support,” he added.
Similarly, Emma Wade Smith OBE, Her Majesty’s Trade Commissioner for Africa at the UK Department for International Trade, said that improving access to markets for Africa’s farmers is critical to food security in the continent and globally, noting that it is also essential to sustain and improve the livelihoods of Africa’s smallholder farmers.
“The positive impact of this CDC investment goes well beyond the hundreds of thousands of smallholder farmers – many of whom are women – whose lives will be directly and positively affected,” Smith said.
“It also speaks to the UK Government’s ambition to be Africa’s investment partner of choice, providing support for the long-term that sustains jobs and enables technology-driven improvements to the way we do business together.”
She stated that the capital CDC Group has provided to ETG marks one of the largest corporate debt investments in CDC history, adding that the long term partnership between them brought by the commitment is a testament to the catalytic role that the agriculture and rural development sector will play in Africa’s next phase of growth, over the next decade.
She added that the debt commitment will also contribute to the UN Sustainable Development Goals two – Zero hunger and eight – Decent work and economic growth.