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CDC targets crop yields and food security with $100m debt facility

Debt commitment to ETG will allow the agricultural conglomerate to strengthen its food value chains which support more than 550,000 smallholder farmers in Africa alone.

British development finance institution and impact investor CDC Group’s $100 million debt commitment to ETG will measure its success by assessing the African conglomerate’s contribution to crops yields, agricultural productivity and delivery of farmer skill development.

Brad Smith, CDC Group investment director, corporate debt, told Agri Investor the goals are linked to the primary goal of smallholder farmer livelihoods in Africa and Asia, where the “food and agri sector remains the single biggest source of employment across both continents and a key contributor to food security,” Smith said in an email.

“Supply chain disruptions have created difficulties for local farmers in many countries, affecting their ability to access seeds and fertilizers when they need them most – before the growing seasons. By supporting ETG, CDC aims to support the integration of value chains, support sustainable local agriculture businesses with a focus on ESG, and preserve smallholder farmers’ resilience and emergence from the pandemic to a greener world,” he added.

ETG is an African agricultural conglomerate founded in Kenya in 1967. The company has a presence across 48 countries in Africa and Asia, with a limited presence in Canada and Australia in sectors such as inputs, logistics, merchandising and food processing and storage.

The debt commitment was provided as a single and fully distributed facility, which will support the growth of ETG’s food and agriculture business. It will also be used to help strengthen the company’s food value chains by expanding its logistic networks, boosting agriculture yields and the production of staple foods such as grains, rice and cocoa, it said in a statement.

ETG has links with more than 550,000 smallholder farms across Africa, which the CDC’s Smith said was a big draw for the DFI, for whom it provides consistent future demand through access to regional and global markets.

The company also operates a “two-way logistics model,” whereby it provides fertilizers at farmgate and then collects farmer produce to be marketed in local and global markets.

ETG chief treasury officer Anish Jain said in a statement: “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.”