VIENNA / Austria, 25 November 2024: The OPEC Fund for International Development (OPEC Fund) is stepping into innovative territory with its first-ever sustainability-linked loan.
The US$40 million contribution is part of a US$394 million financing package for ETC Group (ETG), a leading African agricultural supply chain manager. This initiative aims to empower smallholder farmers, strengthen food security, and promote environmental responsibility across sub-Saharan Africa.
The sustainability-linked loan incentivizes ETG to achieve specific environmental, social, and governance (ESG) goals. This innovative approach ties loan terms to positive outcomes, encouraging the company to enhance farmer livelihoods, minimize environmental impact, and bolster food security.
"This groundbreaking loan underscores the OPEC Fund's commitment to driving sustainable development through cutting-edge financing solutions," said OPEC Fund President Abdulhamid Alkhalifa. "Our longstanding partnership with ETG allows us to tackle food security challenges, strengthen agricultural value chains, and improve the lives of countless smallholder farmers in sub-Saharan Africa. This collaboration further emphasizes our dedication to integrating sustainability principles into our private sector operations."
The financing package, co-arranged by FMO, TDB, and several other development finance institutions, will provide ETG with the working capital needed to support over 600,000 smallholder farmers. This builds upon the OPEC Fund's successful past collaborations with ETG, which have already benefited more than 350,000 farmers, with a significant portion of funds directed towards least developed countries.
This initiative exemplifies the combined efforts of development finance institutions working together to cultivate a more resilient and sustainable agricultural sector in Africa.
