Dutch state-backed development bank FMO has launched its US$90 million funding package for Vietnamese rice exporter Loc Troi Group with the aim of promoting sustainable agriculture in Vietnam, at the Netherlands-Vietnam Mekong Delta Business Forum in Ho Chi Minh City.

FMO’s credit package will go through two senior secured facilities to finance Loc Troi’s expansionary capital expenditure to upgrade its subsidiary and associate rice mills and warehouses, and increase working capital to support its integrated model programme.

The Ho Chi Minh City-headquartered company – whose rice business is centred in the Mekong Delta, Vietnam’s rice bowl – is rolling out an integrated model of pre-financed contract farming for rice farmers and employs more than 3,600 employees, including 1,200 agronomists who provide technical advice and crop management services to farmers.

“The vision of Loc Troi Group aligns with FMO’s in promoting sustainable agriculture in Vietnam,” the bank says. “The proposed transaction intends to create jobs, strengthen food production and security, improve farmer livelihoods, mobilize private funding, strengthen climate adaptation and resilience of rice farmers and reduce methane-related rice emissions.”