Borrower Overview
 

TriLinc has provided financing to a resource trader based in Hong Kong and operating in Indonesia. TriLinc’s financing will support the purchase and procurement of resources from mid-sized suppliers in East and South Kalimantan, Indonesia to be sold to a large Indian multinational infrastructure company. This will ultimately support the Indian Government’s “Power for All” initiative which aims to provide adequate, uninterrupted electricity for all households, industries and commercial establishments in India by March 2019. The borrower manages the supply chain on the ground, including local logistics, regulatory issues, operational risk and supplier relationships to ensure overall performance. The borrower’s trading activity aims to directly address the growing electricity demand in India that stems from economic development, urbanization, and improved electricity infrastructure in many regions of the country. The company supports job creation and local economic development in Indonesia through its suppliers. Activities such as hiring local vendors, land removal, road maintenance, jetty and fleet operations, fleet technician and mechanic reporting create employment for over 1000 people per supplier alongside hiring at least one additional contractor per supplier, to support all activities. Of note is the chosen suppliers have undergone environmental impact assessments, obtained environmental clearing licenses issued by the Indonesian Department of Mining and Minerals, and undergo quarterly reviews of standard operating procedures by the borrower company.

Market Overview

Although Hong Kong is a high-income country, an exception was made for this borrower’s high impact in Indonesia, which meets TriLinc’s standards for its performance across relevant growth, stability, and access metrics.¹ Indonesia is a low-income country, the world’s fourth most populous nation, the world’s tenth largest economy in terms of purchasing parity, and a member of the G-2.² In 2017, Indonesia ranked ninth across the East Asia and Pacific region on the World Bank’s Ease of Doing Business index.² As the fifth largest economy in the East Asia and Pacific region with a GDP of $932.3 billion, the country’s well-developed macroeconomic environment, innovation, and business sophistication led the country to benefit from the estimated $493.2 billion in foreign direct investment that flowed into the region in 2016. ³ Robust domestic demand across East Asia & Pacific region has helped spur regional GDP growth to 6.3 % in 2016, and is projected to reach 6.1% by 2019⁴ Corruption and inefficient government bureaucracy are seen as the most pressing hurdles facing the country’s productivity and competitiveness. Out of a population of 252 million, more than 28 million Indonesians still live below the poverty line.⁵ Approximately 40% of the entire population remain vulnerable of falling into poverty, as their income hovers marginally above the national poverty line.⁶

Additional Sustainability & Impact Highlights

• Quality training – the borrower reports that it offers its employees training on resource sourcing, quality control, and inspection procedures.
• Socially responsible activities for suppliers – the borrower reports that each of the its suppliers participate in activities that include constructing education facilities and health clinics plus enhancing infrastructure development such as electricity distribution, clean water access, and transportation.
• Clean water, schools, health clinics and electricity – the borrower reports that its suppliers are responsible for constructing schools, supporting students with uniforms, and daily school lunches. They have constructed health clinics staffed with nurses and a doctor. They have supplied villages with clean water through the digging of a deep well infrastructure. Additionally, they are responsible for providing electricity access to many of these households with local generators and construction of public tower lights. Also of importance is a reported budget of US $1.5 million for Corporate Social Responsibility activity.

¹There is no assurance that our investment in this company or this market will be successful. ²The World Bank, World Development Indicators Database, 2016 ³The World Bank, Data East Asia and Pacific 2016⁴The World Bank, Global Economic Prospects, June 2017 ⁵The World Bank, World Development Indicators Database, 2016 ⁶The World Bank, World Development Indicators Database, 2016

The above information is as of the initial date of investment: November 16, 2017

RISK FACTORS
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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