The Swedish DFI has offered a working capital loan of up to $15m as part of a wider FMO-led initiative to support Robust International increase its local processing capacity across several African countries.
Swedish development finance institution (DFI) Swedfund has joined other DFIs and development finance specialists in an initiative aimed at increasing the local processing capacity of Robust International, a multinational agricultural commodities trader, across several African countries.
The $15m (€14.4m) loan from Swedfund will be part of a working capital facility of $105m and will be used to source sesame seeds and cashew nuts directly from cooperatives, aggregators and farmers locally to support operations at the company’s new processing facilities in Côte d’Ivoire, Mozambique and Burkina Faso.
The working capital facility also includes contributions from Dutch entrepreneurial development bank FMO, who leads the initiative, as well as from British International Investment (BII), France’s Proparco and ILX, the Amsterdam-based asset manager specialising in global development finance co-investment strategies.
Sofia Gedeon, investment director – food systems at Swedfund, told Impact Investor that the investment would contribute to economic growth in the three countries by adding value to the local supply chain.
Developing local supply chains
Gedeon said that in many developing countries, including those in Africa, local processing capacity is limited, which means that raw agricultural products are often exported rather than processed locally, reducing the economic benefits to local communities.
“By increasing processing within the country, more value is retained, creating jobs, increasing incomes and strengthening trade opportunities. Developing local industries also plays a role in poverty reduction by creating jobs and improving market access for smallholder farmers,” she said.
Gedeon said that Robust was evolving from traditional trading and processing to becoming an end-to-end integrated supply chain company.
“This shift allows raw commodities to be processed locally rather than being exported for refinement elsewhere,” she said, adding that by increasing local production capacity, Robust was helping to retain more value within the region, creating jobs and strengthening local industries.
“Swedfund’s investment supports this development to promote economic growth and sustainable industrialisation,” she added.
Impact measurement
The impact of the loan will be measured through annual reporting on key indicators such as the number of jobs created, taxes paid and commodities processed and sold, according to Gedeon.
“The investment also supports responsible sourcing and better working conditions for farmers and workers in the supply chain. By enabling local processing, it reduces the environmental impact of exporting raw materials for refining elsewhere, while promoting a more sustainable and inclusive economy,” she added.
