ETC Group (Mauritius)
Region and country of operations: Africa
Jurisdiction of registration: Mauritius
Business sector: Agriculture
Date of agreement (month/year): 4/2020
Finnfund’s financing: USD 15,000,000
Share of Finnfund’s financing: 9%
Size of project/financing: USD 150,000,000
Environmental and social category: A
Export Trading Group (ETG) is a large and diversified agricultural commodity trader and processor with most of its operations in Africa. ETG has about 70 direct subsidiaries serving more than 40 countries on five continents.
ETG is one of the largest players in agribusiness trading and processing in Africa. Several major DFIs are funding its operations and it is widely considered as one of the most bankable agribusinesses in Africa. DEG is arranging a USD 150 million senior unsecured long-term working capital facility for ETG in order to structurally improve the balance sheet and enhance trading growth. The DEG arranged facility will be contractually earmarked to Africa and Finnfund’s proceeds will be used in Tanzania, Malawi and Mozambique in five ETG subsidiaries.
Main development impact
ETG’s operations alleviate some of the most fundamental problems of African agriculture. It improves market access to local farmers by sourcing commodities from rural areas. It increases competition and thereby improves the prices and income to farmers. It improves access to critical inputs such as fertilizers and seeds, which help farmers to increase their yields.
Its private extension services by training the farmers supports the (often) nonfunctional and inefficient government services. ETG’s infrastructure network of warehouses decrease post-harvest losses which are the greatest in Africa. ETG’s vehicle fleet and intra-Africa trade decrease the market volatility and improve market integration.
ETG’s operations also can be estimated to create export revenues to Africa (although it also imports inputs and commodities to Africa). Finally, ETG’s corn-soya production facilities and sales to UN organizations indirectly help malnourished people in Africa.