Dutch development bank FMO has signed a US$15mn loan with Agricola Pampa Baja, a Peruvian fresh produce exporter.

The financing represents an example of the role development banks can play in furthering sustainable commodities production. As part of the loan’s conditions, the company must implement and remain compliant with an enhanced environmental and social action plan, which includes an integrated water resource management system.

The company recently expanded in Northern Peru, an area under the Peruvian government’s Olmos irrigation project, which is transforming desert land into agricultural land for certain crops through irrigation works. As such, it has been the subject of intensive due diligence and engineering efforts requiring it to adhere to best practice.

The loan will be used for land preparation, state-of-the-art irrigation systems, plant and equipment (including cooling and packaging facilities). The project also includes support for local smallholder farmers, connecting them to the company via skill and know-how transfer, increased farmer income and production, as well as the widening of rural development opportunities.

“FMO is proud to play a part in supporting Pampa Baja’s geographical expansion activities which will allow them to broaden their off-season production window as well as increase food production and economic development in a remote and under-developed region of Peru,” says Suzanne Gaboury, FMO’s director for agribusiness.