Impact Fund Denmark leads US$22.5M sustainability-linked loan to boost African agriculture
This investment specifically empowers women in African agriculture by prioritising their access to essential training and financial resources.
AFRICA – Impact Fund Denmark has committed a US$22.5 million loan to Export Trading Group as part of a syndicated US$600 million financing package to strengthen agricultural value chains across Africa, with interest rates tied to environmental and social milestones.
The facility is co-funded by a consortium of development finance institutions, including FMO, Trade and Development Bank Group, Finnfund, and CDP. It is structured as a sustainability-linked loan, with interest rates linked to ETG’s achievement of environmental, social, and governance targets.
The performance targets include expanding financing and support for women smallholder farmers, increasing agricultural advisory services and training, and promoting deforestation-free supply chains while reducing carbon emissions.
Additionally, sustainability-linked loans drive environmental and social change by incentivizing borrowers to meet predefined ESG milestones. When companies achieve these targets, they receive lower interest rates, providing a direct financial incentive for sustainable practices.
Furthermore, this investment specifically empowers women in African agriculture by prioritizing their access to essential training and financial resources. Women smallholder farmers often face barriers to credit and extension services compared with their male counterparts.
Therefore, this focus on women’s economic empowerment contributes to broader food security and poverty reduction goals across the continent.
ETG operates in 32 African countries, sourcing crops from smallholder farmers and providing agricultural inputs, including fertilizers, seeds, and advisory services, to improve productivity.
Through its extensive network, ETG helps stabilize food supply chains, reduce post-harvest losses, and enable farmers to access better prices for their produce. The financing is expected to improve agricultural logistics, financing, and market access, while supporting more resilient and inclusive supply chains across Africa.
Impact Fund Denmark Managing Director and Co-Head of Sustainable Food Systems, Otto Vinther Christensen, said the financing supports ETG’s role in strengthening local agricultural value chains and improving outcomes for farmers.
Additionally, Impact Fund Denmark Deputy Chief Executive Officer, Søren Peter Andreasen, said the loan places particular emphasis on supporting women farmers, expanding advisory services, and reducing deforestation.
Moreover, this collaborative effort highlights a commitment to long-term economic productivity and ecological preservation across 32 nations by fostering a more resilient and inclusive food system throughout the region.
Lastly, the sustainability-linked structure ensures that financial returns align with positive social and environmental outcomes, demonstrating how innovative financing mechanisms can drive sustainable agricultural development across Africa.
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