TriLinc has provided financing to a locally-owned and operated steel producer in Zambia. Established in 1989, the borrower has long been a partner in Zambia’s socioeconomic development and is the country’s first integrated steel and iron manufacturer. Historically, scrap metal inputs sourced in Zambia were exported to regional markets for processing, where the final steel product was then imported back to Zambia, typically at higher prices than locally manufactured steel products. By sourcing local scrap metal and integrating it into the steel manufacturing process, the borrower has built a reputation for delivering cost efficient, quality products to local construction-related businesses and therefore reducing costs associated with improving the country’s physical infrastructure. TriLinc’s financing provides the borrower with a source of short-term capital to generate liquidity, purchase raw material, and support additional production capacity of iron and steel products, including rebar, angle iron and wire rod products. Recognized in Zambia as a leading employer in the region, the borrower expects that TriLinc’s financing will support its efforts to quadruple its employee base once its plant reaches full manufacturing capacity.
Zambia is classified as a middle-income country by the World Bank.1 Between 2010 and 2014, annual GDP growth rates averaged approximately 7.22%.1 Zambia is home to Victoria Falls, the largest curtain of falling water in the world- one and a half times wider than Niagara Falls and twice its height.2 Zambia’s export activity has traditionally been dominated by copper, cobalt, electricity, tobacco, flowers, and cotton.3 Conversely, the country’s main imports have been focused in machinery, transportation equipment, petroleum products, electricity, fertilizer, foodstuffs, and clothing.3
Zambia meets TriLinc’s country standards for its performance across relevant growth, stability, and access metrics.4 In 2015, it ranked sixth across the Sub-Saharan African region on the World Bank’s Ease of Doing Business index.5 As the 11th largest economy in Sub-Saharan Africa with a GDP of $27.1 billion,6 Zambia has a relatively developed financial market, strong public institutions, and a high degree of business sophistication and innovation, which have led the country to benefit from the $37 billion in net foreign direct investment estimated to have flowed into the region in 2014.7 Robust domestic demand across Sub-Saharan Africa has helped spur regional GDP growth to 4.6% in 2014, and GDP is projected to strengthen to 5.0% by 2017.8
Additional Sustainability & Impact Highlights
- Conscious of its impact on the environment, the borrower utilizes a state-of-the art fume extraction system and water recycling equipment to control emissions and waste discharges from its steel production and rolling mill facilities. The borrower also proactively seeks to further mitigate its impact on the environment by planting trees on its landsite and aligning its operations with international environmental management system standards
(certification process currently in process).
- The borrower actively engages in local community development initiatives, including the support of: 1) a primary and secondary school benefitting approximately 800 children; 2) water borehole drilling to improve community access to clean water; and 3) a community “open door” policy that consists of participatory evaluation, monitoring and awareness campaigns focused on the borrower’s social and environmental sustainability policies
- As additional support for its employees, the borrower offers an on-site clinic and on-call ambulance, a program providing HIV/AIDS awareness training, counseling and treatment, and interest-free loans for unexpected life events (e.g., death in the family).
1The World Bank, World Development Indicators Database, Zambia, 2015. 2Victoria Falls Guide, 2015. 3CIA, The World Factbook, 2015: Zambia. 4There is no assurance that our investment in this company or this market will be successful. 5The World Bank, Ease of Doing Business Report, 2015. 6The World Bank, World Development Indicators Database, 2015. 7The World Bank, Data, Sub-Saharan Africa, 2015. 8The World Bank, Global Economic Prospects, June 2015.
The above information is as of the initial date of investment: August 17, 2015.
This borrower is no longer in TriLinc’s portfolio.
TriLinc originally performed an SDG mapping exercise in December 2017 to map all of our borrower companies, both current and exited from our portfolios, to specific SDGs based off of business activity. TriLinc’s official SDG alignment methodology was not finalized until June 30, 2018. For borrowers that had exited TriLinc’s portfolios prior to this time period, the selected SDGs for these borrower are a reflection of what TriLinc believes would have been the SDG alignment if 1) the SDGs had been in effect and 2) TriLinc had integrated the SDG alignment while the company was in the portfolio. The SDG mapping presented does not include input from Investment Partners or borrower companies given that the companies were no longer in the portfolio when the alignment was finalized.
There is no guarantee that TriLinc’s investment strategy will be successful. Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion. TriLinc selects investments and conducts operations on behalf of its clients, and will face conflicts of interest. Investment with TriLinc is not suitable for all investors. Securities Offered through CommonGood Securities, LLC, a member of FINRA and SIPC.
An investment with TriLinc carries significant fees and charges that will have an impact on investment returns. Information regarding the terms of the investment is available by contacting TriLinc. This is a speculative security and, as such, involves a high degree of risk. Investments are not bank guaranteed, not FDIC insured and may lose value or total value. Some investments may have been made in an investment vehicle that is no longer open for investment. The highlighted investment may or may not have been profitable. There is no guarantee that future investments will be similar.
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