Finnfund joins USD 600 million sustainability-linked financing for ETG

Finnfund is participating in a USD 600 million sustainability-linked loan facility for ETG, alongside a group of international development finance institutions and investors. The investment aligns with Finnfund’s focus on sustainable agriculture, food security and inclusive economic development in emerging markets.

FMO, the Dutch entrepreneurial development bank, and the Trade and Development Bank Group (TDB Group) have co-arranged a sustainability-linked syndicated loan facility for ETC Group (ETG), supporting the company’s working capital needs and its role in strengthening agricultural value chains across Africa.

The facility was initially signed for USD 394 million by FMO and TDB Group together with DEG, FinDev Canada, the OPEC Fund for International Development, and Proparco, with FMO Investment Management and ILX Fund as participants. Following FinDev Canada’s increased commitment and the addition of new participants including the Asian Development Bank (ADB), Cassa Depositi e Prestiti (CDP), Finnfund, Impact Fund Denmark (IFDK), OeEB – the development bank of Austria, the facility has since grown to USD 600 million. The financing supports ETG’s operations across mainly Africa, as well as Asia via ADB, and incorporates a sustainability-linked structure, with the interest margin tied to the achievement of agreed environmental and social performance targets.

Agriculture is central to Africa’s economy and livelihoods, yet many smallholder farmers remain constrained by limited access to finance, inputs, infrastructure and formal markets. By supporting companies that connect farmers to structured markets and provide access to agricultural inputs, dedicated training and advisory services, the participants in this facility aim to contribute to more resilient, inclusive and sustainable food systems, enhanced food security and reduced greenhouse gas (GHG) emissions.

The facility plays a vital role in strengthening agricultural value chains and ensuring that smallholder farmers are more directly connected to regional and international markets. Through the financing of essential commodities such as grains, pulses, oilseeds, and fertilizers, it is also helping to stabilise food supplies, enhance farmer incomes, and enable more inclusive participation of women and youth in rural economies.

Founded in Kenya in 1967, ETG has developed into a global player with a presence in more than 50 countries, spanning 6 continents. The Group has a diverse portfolio of expertise across various industries, encompassing agricultural inputs, chemicals, logistics, processing, food and food ingredients, energy, metals, technology and supply chain optimization. A core strength is the ability to connect smallholder farmers to regional and global markets, while supplying key inputs such as fertilizers and seeds across the continent. One of ETG’s key ambitions is to reach one million African smallholder farmers with services that enhance production, crop quality, traceability and climate resilience. The sustainability-linked structure is designed to incentivize progress against agreed targets and to align lenders and investors around a shared sustainability framework.

The facility has so far exceeded several of its impact objectives relating to deforestation and reforestation as well as the number of farmers – including women – having received extension services, while bolstering intra-African agricultural commodities trade flows.

Huib-Jan de Ruijter, Co-CIO at FMO, said: “ETG plays an important role in connecting African smallholder farmers to markets, inputs and services. Through this sustainability-linked loan, we are supporting a long-standing client in strengthening its financing base while encouraging measurable progress on environmental and social priorities. This transaction also demonstrates how FMO can mobilize capital alongside partners to support sustainable private sector development at scale.”

Michael Awori, TDB’s Trade and Development Banking Chief Executive for the Eastern & Western African Region added: “We are pleased to continue strengthening our longstanding collaboration with ETG working alongside partners such as FMO, through the extension of this sustainability-linked facility. It allows us to reach those at the heart of Africa’s agricultural transformation, the smallholder farmers, agribusinesses, and traders who are driving regional food systems forward.”

Paul Van Spaendonk, Chief Treasury Officer at ETG, said: “Despite significant and rapid growth over the years, ETG’s commitment to the African continent remains steadfast. We are proud to partner with institutions that enable us to truly make an impact in the lives of people, whilst keeping a keen focus on addressing pressing issues pertaining to climate change and land conservation. We are enthused to continue this journey and to play our role in creating a sustainable future for generations to come.”

“This investment in ETG is closely aligned with Finnfund’s strategy and priorities,” said Finnfund’s Senior Investment Manager Pauliina Halonen. “Agriculture is one of our key focus sectors because it plays a critical role in creating jobs, strengthening food security and supporting sustainable economic development in emerging markets. Through ETG’s extensive presence across agricultural value chains, we can help improve market access for farmers, increase productivity and resilience, and promote more sustainable agricultural practices. We believe this investment has the potential to generate both meaningful development impact and long-term commercial value, while contributing to more inclusive and resilient food systems.”

“Agriculture employs millions of people across Africa, but too much value is lost when farmers lack access to logistics, financing and markets. ETG addresses this challenge at scale. What makes this investment particularly compelling is that the loan incentivises ETG to increase its support for women farmers, expand its advisory services and reduce deforestation,” says Søren Peter Andreasen, Deputy CEO of Impact Fund Denmark.

Isabel Chatterton, ADB Director General for Private Sector Operations Department commented, “ADB is helping smallholder farmers in India and Viet Nam adopt more sustainable production practices, access certification and fair market opportunities, and build resilience to climate risks through this financing. Our partnership with FMO, other development finance institutions, and ETG demonstrates ADB’s commitment to building inclusive and climate-resilient agricultural value chains across Asia and the Pacific, while expanding opportunities for smallholder farmers, particularly women.”

Sabine Gaber, CEO and Member of OeEB’s Executive Board, said: “We are pleased to renew our partnership with ETG, a longstanding client and key player in strengthening agricultural value chains across Africa. This financing will help secure access to essential food commodities, support local businesses and farmers, and contribute to economic resilience in the markets where ETG operates. The transaction closely aligns with OeEB’s strategic focus on sustainable private sector development, strengthening economic infrastructure and industry, and deepening our engagement in Africa, where we aim to create lasting development impact through responsible investments.”

More information:
Senior Investment Manager Pauliina Halonen, Pauliina.halonen@finnfund.fi

Media contact:
Senior Communications and Marketing Manager Valpuri Mäkinen, valpuri.makinen@finnfund.fi