FMO arranges $30m loan to Peruvian agri company

The Dutch development bank has helped secure financing for a Peruvian-Danish joint venture’s pursuit of environmental and social sustainability in agriculture.

Dutch development bank FMO has arranged a $30 million loan to DanPer Trujillo that will help the Peruvian agricultural processor manage water resources in coastal regions.

In addition to a $15 million FMO contribution, Swiss Re is providing $10 million and the Infrastructure Development Fund that FMO operates for the Dutch Ministry of Development Cooperation will contribute $5 million, FMO confirmed to Agri Investor.

FMO said in a statement that it has established an agreement with DanPer – a leading exporter of fresh, canned, frozen fruits, vegetables, and super Andean grains, mainly to North American and European markets – to manage water in coastal regions that normally see limited rainfall, though they experienced torrential rainfall during 2015’s El-Niño

FMO communications officer Loucky Spit told Agri Investor that farmers will be trained in irrigation techniques, including drip irrigation, as part of an Integrated Water Management Plan that is part of the loan agreement. FMO will also support DanPer’s ongoing efforts to employ underprivileged women and pursue “social responsibility programmes”.

DanPer provides farmers in its supply chain with technical advice on soil cultivation and water use and training in Good Agricultural Practices, a set of procedures endorsed by the United Nations Food and Agriculture Organisation.

“The loan from FMO will support the sustainable growth of their operations,” said FMO director of Agribusiness Suzanne Gaboury, in the statement. “Financing DanPer fits well with our objective of supporting leading companies in the sector who have a positive impact on the agricultural value chain.”

Established in 1993, DanPer supplies canned and frozen asparagus, artichokes, peppers, mangoes as well as other fruits and specialty products grown by more than 500 small farmers spread throughout Peru. The company also exports “super grains” such as quinoa, chia and amaranth to markets around the world.

Peru’s climate enables year-round production and the nation’s off-season harvesting window makes it a key agricultural exporter, according to FMO. Agricultural exports totaled $5.3 billion last year, with the United States and the Netherlands as the biggest buyers.

In the years since signing a free trade agreement with the US in 2009, Peru’s expanding middle class has also helped the country develop as a market for high-value, consumer orientated agricultural products. US exports of prepared foods, beef products and dairy products to Peru have expanded by more than 300 percent since the signing of the agreement, according to the USDA Foreign Agricultural Service.

At the Agri Investor Forum last month in Chicago, Shared-X chief executive Tony Salas included Peru in a list of South American governments most supportive of foreign investment into the agricultural sector.

Earlier this year, FMO extended a $15 million loan to Agricola Pampa Baja, a family-owned fruit, vegetable and diary producer in Peru.