Loc Troi and FMO sign $90-million credit package to advance sustainable rice production

November 03, 2023 | 10:33
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On November 2, Loc Troi Group JSC (LTG) announced the signing of a Letter of Intent for a $90-million credit package between LTG and the Dutch Entrepreneurial Development Bank (FMO).
Loc Troi and FMO sign $90-million credit package to advance sustainable rice production

The signing was witnessed by Vietnamese Prime Minister Pham Minh Chinh and Dutch Prime Minister Mark Rutte at the Samsung Research and Development Centre in Hanoi.

As a leading agricultural services corporation in Vietnam, LTG has consistently made efforts to realise its mission statement of, "Together with farmers for sustainable development." Thanks to its efforts and commitments, it has attracted many partners during its 30 years of development.

FMO is a credit institution with AAA ratings from both Fitch and Standard & Poor's. Its vision aligns with LTG’s in terms of promoting sustainable agriculture.

FMO intends to finance LTG following a careful, detailed, and factual verification process in line with international environmental, social, and governance standards. LTG decided to receive FMO's funding based on the stability of its capital sources and its consistency in the direction of sustainable agricultural development.

The proposed transaction intends to improve farmer livelihoods, strengthen food security, mobilise private funding, strengthen climate adaptation, and reduce methane-related rice emissions.

Over the past two years, FMO's experts have travelled to Vietnam several times. In addition, other international independent appraisal units have come once or twice a week to visit LTG's factories in the Mekong Delta provinces, as well as held hundreds of online meetings between the two sides.

In addition, partners also conducted interviews with many relevant parties, including governmental departments, farmers, and the local population. LTG has proven its strict application of labour regulations, such as those relating to child labour, gender equality, supplier evaluation processes, land procedures, environmental pollution levels, and improving people's lives in the areas it operates in.

FMO feels secure and believes in LTG's production and business activities, which have had a positive impact on the environment and on society. As a result, FMO has agreed to grant a financing facility of $90 million.

It will be used for both short- and long-term purposes. The short-term credit has been allocated to financing items linked to sustainable rice production, while the medium- and long-term credit is set aside for agricultural infrastructure, including machinery and warehouses at 10 rice factories owned by members of the Loc Troi agricultural ecosystem, thus improving LTG's production and supply capacity.

With this $90-million financing facility, LTG is committed to advancing sustainable development, including that of its partners in the supply chain, improving farmer livelihoods, and building a more liveable rural environment.

LTG believes that the investment will bring several benefits to farmers across Vietnam and rice consumers in both local and foreign markets, thereby contributing to the sustainable development of the agricultural sector in Vietnam and around the world.

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By Thanh Van

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