Eco-Business II Sub-Fund

Customer

Eco-Business Sub-Fund II is an open ended, structured debt fund founded in 2019 providing loans to sustainable agriculture/ agri-processing, fishery/ aquaculture, forestry and tourism in Sub-Saharan Africa. Fund Manager is Finance in Motion, a well-known partner for DEG and KfW.

Funding Objective

The Eco-Business Sub-Fund II focuses on investments in sustainable agriculture and trade, sustainable fishery and aquaculture, sustainable forestry and eco-tourism in Sub-Sahara Africa. Its investments can be direct, e.g. to farmers, producer associations, cooperatives, projects or companies active along the value chain or indirect through local financial institutions or other intermediaries (such as commodity off-takers as well as those companies involved in production, processing or storage), which on-lend the funding in cash or kind into the agricultural sector. Portfolio as well as funding are still building up and the Fund has not yet reached its target volume.

Reasons for financing

The 2023 impact report highlights the significant impact and sustainability of the fund, including the creation of 179,000 indirect jobs and the sustainable management of 137 hectares. The fund demonstrates strong contributions to local income through salaries, capital expenditures, procurement, interest expenses, and income tax payments by investee companies, directly benefiting local communities. As the fund's portfolio grows, its contributions to income generation are expected to increase further.

The financial support provided to investee companies, particularly in employment-intensive sectors like agriculture, is expected to drive the creation of both direct and indirect jobs. Additionally, all sub-loans distributed by the fund qualify as "green" loans, supporting the decarbonization of local economies and agricultural value chains while promoting sustainable development.

This transaction aligns with Sustainable Development Goals (SDGs), including SDG 8 (Decent Work and Economic Growth) through job creation and income generation, SDG 9 (Industry, Innovation, and Infrastructure) by fostering sustainable agricultural value chains, and SDG 13 (Climate Action) by supporting climate finance initiatives.

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