FMO, the Dutch entrepreneurial development bank, has committed R500 million ($27 million) to support the revival and green transformation of Gledhow Sugar Company, one of the most significant sugar milling operations in KwaZulu-Natal.

The seven-year local currency financing facility will fund the final phase of Gledhow’s modernization programme following the company’s successful emergence from business rescue in early 2025 under new ownership.

The investment restores and upgrades a strategically important agro-processing asset, strengthening the resilience of South Africa’s sugar value chain while supporting rural livelihoods and employment across the region.

Long-term financing for a critical industry

The transaction highlights FMO’s ability to provide long-term rand-denominated financing in turnaround situations where funding remains scarce. By offering local currency financing with an extended tenor, FMO reduces exchange-rate risks and enables sustainable investment in South Africa’s productive economy.

Hans Boogard, Director of Agribusiness, Food and Forestry at FMO, said the investment demonstrates the institution’s commitment to rebuilding critical industries while accelerating sustainability goals.

“By enabling Gledhow’s modernization and shift away from coal, we are not only reducing environmental impact but also strengthening an important agricultural value chain and supporting inclusive growth for thousands of farmers in KwaZulu-Natal,” Boogard said.

He added that the transaction also illustrates how FMO delivers long-term local currency financing where it is not readily available, allowing businesses to invest with greater confidence in future growth.

From coal to Bagasse energy

A key element of the modernization programme is Gledhow’s transition from coal-fired energy to a bagasse-based power system that uses sugarcane by-products to generate energy for milling operations.

The move is expected to significantly lower greenhouse gas emissions, improve energy efficiency and reduce operating costs, positioning the business as a more competitive and sustainable agro-industrial enterprise.

Supporting farmers and rural communities

Founded in 1879, Gledhow operates an integrated sugar mill and refinery in KwaDukuza and sources sugarcane from commercial growers, land reform projects and smallholder farmers.

Approximately 45% of its sugar supply comes from land reform beneficiaries, while 10% is sourced from small-scale growers, making the mill a critical economic anchor for rural communities.

Pierre Berrangè, Chairperson of Gledhow, said: “The funding from FMO will enable Gledhow to complete the ongoing modernization programme of the Gledhow sugar mill, with substantial long-term benefits not only to Gledhow but also for its various stakeholders.”

FMO expands African agribusiness footprint

Headquartered in The Hague, FMO finances private-sector growth across emerging markets with a strong focus on financial institutions, renewable energy and agribusiness.

The lender is also expanding its African footprint, including plans for a regional office in Abidjan as it deepens long-term operations across West Africa.