OPEC Fund invests US$40M in sustainable agriculture for Africa

AFRICA – The OPEC Fund for International Development (OPEC Fund) has announced a US$40 million loan as part of a US$394 million sustainability-linked financing package for ETC Group (ETG), one of Africa’s leading agricultural commodity supply chain managers. 

The funding aims to enhance ETG’s working capital, strengthen food systems, and support the livelihoods of over 600,000 smallholder farmers across sub-Saharan Africa.

This marks the OPEC Fund’s first sustainability-linked loan, a financing mechanism that ties lending terms to the achievement of environmental, social, and governance (ESG) targets. 

Through this loan, ETG is incentivized to improve the welfare of farmers, reduce environmental impacts, and bolster food security across its operations.

“Our first sustainability-linked loan demonstrates the OPEC Fund’s dedication to fostering sustainable development through innovative financing. Our strong and longstanding partnership with ETG enables us to address food security, strengthen agricultural value chains, and improve the livelihoods of smallholder farmers in sub-Saharan Africa,” OPEC Fund President Abdulhamid Alkhalifa emphasized the importance of the partnership. 

“This partnership also reflects our commitment to embedding sustainability at the core of our private sector operations.”

Driving growth in African Agriculture

ETG, originally established in Kenya in 1967 as the Export Trading Company, has evolved into a major player in Africa’s agricultural sector. 

Operating more than 300 warehouses and 70 processing plants, the group manages one of the continent’s largest independent agricultural supply chains. 

Since 2009, the OPEC Fund has supported ETG’s expansion with several loans, beginning with an initial US$30 million facility. These investments have benefitted over 350,000 smallholder farmers, with more than half of the funds directed to least developed countries (LDCs).

The new financing will build on this legacy, enabling ETG to continue improving agricultural value chains, expanding market access for farmers, and increasing the efficiency of food systems.

The US$394 million loan package was co-arranged by multiple development finance institutions. 

The Dutch Entrepreneurial Development Bank (FMO) and the Eastern and Southern African Trade and Development Bank (TDB) led the arrangement, with participation from Germany’s Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Canada’s FinDev Canada, and France’s Proparco.

OPEC Fund’s global development mandate

The OPEC Fund is uniquely positioned as the only globally mandated development institution that provides financing exclusively from its member countries to non-member countries. 

Since its establishment in 1976, the Fund has focused on fostering economic growth and social progress in low- and middle-income nations.

With a portfolio that spans food, energy, infrastructure, clean water, healthcare, and education, the OPEC Fund has committed approximately US$27 billion to development projects in over 125 countries. 

These projects have had a combined total cost exceeding US$200 billion. Rated AA+/Outlook Stable by Fitch and S&P, the Fund continues to play a pivotal role in driving sustainable development globally.