Written by Adedapo Adesanya
GuarantCo, a member of the Private Infrastructure Development Group (PIDG), has provided a 100 per cent guarantee to support Robust International Pte Ltd’s (Robust) $75 million debt facility to build a new cashew nut processing plant in Ogun State, Nigeria.
Under PIDG, GuarantCo receives funding from the UK, Netherlands, Switzerland, Australia, Sweden and Canada to mobilize private sector local currency investment into infrastructure projects and support the development of financial markets in low-income countries in Africa and Asia.
Nigeria is one of Africa’s largest cashew producing countries, producing 300,000 tonnes of raw cashews annually, but less than 10% is currently processed domestically. Since most raw nuts are exported unprocessed to Asia and other countries, up to 80 percent of their potential export value is lost and exposed to currency fluctuations.
According to GuarantCo, the additional plant will more than double Robust’s existing cashew processing capacity from 100 tons per day to 220 tons per day, helping to reduce this structural gap.
The new factory will significantly benefit the local economy as it will source cashew nuts from approximately 10,000 small-scale farmers, primarily low-income farmers.
During the guarantee period, export revenues are expected to increase by up to $335 million and be sourced from the local supply chain.
In addition, the new plant will incorporate the ability to convert waste by-products into value-added biomass and biofuel inputs to increase the environmental impact of the trade.
Up to 900 jobs are expected to be created, 78% of which will be held by women. Robust also aims to gradually increase its sourcing from women farmers from 15% to 25% by 2028 as it expands into new regions in Nigeria and expands its ongoing gender-sensitive support programs for farmers.
The terms of the transaction provided that the debt facility would be provided by a debt platform arranged by Symbiotics, which would issue the debt with the benefit of a GuarantCo guarantee. These notes are fully subscribed by M&G Investments. The transaction was executed in record time following the successful replication of two recent transactions in Ivory Coast and Senegal, also in collaboration with M&G Investments and Symbiotics.
Commenting on the development, Johnny Baxter, the UK’s Deputy High Commissioner, said: “The UK is proud to support innovative financing that mobilizes private capital into Nigeria’s productive economy through UK-supported institutions such as PIDG. By supporting investment in local processing and value addition, this deal will support jobs, exports and more resilient agricultural supply chains. This will be complemented through the UK-Nigeria Enhanced Trade and Investment Partnership and developing countries.” Under the trade scheme, the UK is helping Nigerian businesses increase their exports within and outside the UK, demonstrating how UK-backed partnerships can help businesses grow and compete internationally. ”
Dave Chalila, Head of Africa and Middle East Investments at GuarantCo, said: “This transaction is a collaboration between GuarantCo and M&G Investments and This is our third partnership with Symbiotics and underlines our commitment to bring reproducibility into everything we do to accelerate socio-economic development where it matters most.
“As with the two recent similarly structured transactions, funding was provided through Symbiotics’ institutional investor platform and the notes were externally rated by Fitch and benefited from a rating upgrade guaranteed by GuarantCo.”
Vishanth Narayan, Group Executive Director, Robust International Group, added: “As a global leader in agricultural products, Robust International is committed to building resilient, ethical and value-added supply chains across origin and destination markets. “This transaction is an important step in advancing our long-term strategy to strengthen our processing capabilities, deepen our engagement with farmers, and increase local value addition in the regions where we operate through sustained investment, disciplined execution, and decades of continued investment.” Leveraging our extensive operational experience, we remain focused on delivering reliable, high-quality products while promoting inclusive and sustainable economic growth. ”
Ms Maria Redondo, Director of M&G Investments, said: “This guarantee gives us the assurance to invest in hard currency emerging market debt while supporting Robust’s new cashew processing plant in Nigeria. , is a clear example of how smart credit enhancement can free up institutional capital for high-impact development and effectively manage currency and credit risks. This is another strong step towards channeling institutional capital into meaningful on-the-ground growth.”
Valeria Berzunzza, Head of Structuring and Arrangements at Symbiotics, added: “We are delighted to continue our collaboration with M&G Investments and GallantCo, and now work with Robust on a socially and gender-focused transaction, demonstrating that well-structured products can facilitate commercially attractive, viable and impactful investments.”
