Farming and Engineering Services Limited (FES)

Customer

FES is an agricultural distributor of equipment and service provider, established in 1967, in Malawi.

FES caters for a broad customer base of commercial and emerging farmers. It is the single largest investor in Malawi's agricultural equipment industry. The company provides a wide range of high-tech agricultural solutions including precision and low-till farming; drone technology for crop analysis and crop protection; irrigation systems including water management solutions; and contracting services. AgriLab, an FES initiative, is Malawi’s first independent soil- and leaf-testing facility which allows farmers to test, manage and control their soil, leaf and water quality. This initiative contributes to improved yields and crop quality, increased revenue and reduced input costs.

Funding Objective

Approximately USD 3.1m of equity financing for a minority interest in FES.  

The funds will be used to: Solidify the company as a market leader in Malawi. Support the regional expansion of the company, namely Zambia. Diversify and scale the earnings base of the company through a number of key strategic iniatives.

Reasons for financing

FES’s impact objectives of mechanising African agriculture, ensuring food security and enhancing farmer profitability are aligned with the UN Sustainable Development Goals. Located in a region where resources are limited and input costs high, FES has expanded its offering to include a comprehensive range of climate-resilient precision agricultural solutions.

To provide a supportive shareholder base from which FES can pursue its vision to mechanise agriculture in developing African countries, ensuring food security and enhancing profitability. Furthermore, DEG’s ESG value-add will play an important role in improving operational practices and generating developmental impacts in a region which is dependent on agriculture for local income and economic growth.

The transaction contributes to our strategy of supporting established businesses pursuing their growth initiatives in developing frontier African markets.

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