Farmont Logistics Centre & Pharmacies Expansion

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

EBRD financing of €3 million in two tranches of €2 million and €1 million for the expansion of Farmont's logistics centre and opening and/or acquistion of a small pharmacy retail chain.

Project ID 55228

Status Cancelled

Location

Montenegro

Business Sector

Manufacturing and Services

Notice Type

Private

Company Contact Information

Petar Popovic
petar.popovic@farmont.me
+382 20 663 075
https://www.farmont.me/
Farmont doo Kosic; bb, Danilovgrad Montenegro

Project ID 55228

Status Cancelled

Location

Montenegro

Business Sector

Manufacturing and Services

Notice Type

Private

Environmental Category

Approval Date

13 Aug 2024

Disclosure date

19 Aug 2024

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project description

EBRD financing of €3 million in two tranches of €2 million and €1 million for the expansion of Farmont's logistics centre and opening and/or acquistion of a small pharmacy retail chain.

Project objectives

EBRD financing will enable the Company to expand its existing logistics centre with additional 2,000 sqm, in addition to current one 800 sqm. New logistics centre will fulfil all the energy efficiency standards achieve at least one energy efficiency class better on the energy certificate (EPC) than the national baseline. The expansion of the logistics centre will enable Farmont to increase its capacities and expand its wholesale business. In addition, through tranche 2, the the Company will open several new pharmacies and/or purchase a small chain of pharmacies, that will enable vertical integration, and higher profitability.

Transition impact

ETI Score:60

>Primary Quality: Competitive

Farmont, which is the third largest medicines wholesaler and fourth largest pharmacy retailer in the country will expand in the highly concentrated markets. The Project will lead to incremental forward linkages as the Company will both increase its wholesale capacities and expand its pharmacy business.

The Company will introduce IFRS audit reporting as well as business planning and reporting, which are not currently widespread in this sector in the country.

Secondary Quality: Green

More than 15% of the Bank's proceeds qualifies as GET finance.

Client information

FARMONT MP

Farmont M.P. ("Farmont" or the "Company") is a limited liability family company founded by Momcilo Popovic. The Company deals with wholesale of medicines, medical and sanitary materials, medical devices and equipment. The Popovic family also owns "HELP" ltd, which runs a retail chain of pharmacies operating in Montenegro.

The Popovic family also owns "HELP" ltd, which runs a retail chain of pharmacies operating in Montenegro. HELP currently has 10 pharmacies, up from one in 2019, out of which seven in Podgorica.

EBRD Finance Summary

EUR 3,000,000.00

Senior secured loan.
Loan amount: up to EUR 3.0 million
Tenor: 7 years, including up to 2 years grace period
Two tranches of EUR 2.0 million and EUR 1.0 million respectively. Tranche 2 will be uncommitted.

Total project cost

EUR 3,000,000.00

SOURCES TOTAL EUR 3.3 m
EBRD Tranche 1: EUR 2.0 m
EBRD Tranche 2: EUR 1.0 m
Client Financing: EUR 0.3 m

USES TOTAL: EUR 3.3 m
Logistics centre and land: EUR 1.7 m
Solar panels installation: EUR 0.3 m
Pharmacies network expansion: EUR 1.0 m
Refinancing ST loans: EUR 0.3 m

Additionality

Additionality sources

EBRD offers a tenor, which is longer than available to the client in the market on reasonable terms and conditions.

EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions. Namely, sufficient security for the loan can only be provided once the logistics centre is built, which is not acceptable to local commercial banks. Such financing is necessary to structure the project.

Standard-setting

Client seeks/makes use of EBRD expertise over energy and resource efficiency and climate resilience financing via provision of energy and climate audits, minimum performance standards of technologies, climatei related strategies and policies, monitoring, reporting and verification (MRV) systems etc.

Client seeks/makes use of EBRD expertise on higher financial standards, including through financial covenants.

The Bank will provide its expertise on financial reporting and business planning improvements. Through ASB project the bank offers expertise to the client to improve their financial reporting standards, going from local to IFRS reporting, which is necessary for receiving the EBRD loan and generally improving their access to financing. The Bank will also provide technical assistance for design preparation, energy audit, reduction of CO2 through installation of solar panels, and environmental reporting.

Technical Cooperation and Grant Financing

ASB support: Farmont has joined the Blue Ribbon Programme, which will provide regular technical support for the following five years.

Company Contact Information

Petar Popovic
petar.popovic@farmont.me
+382 20 663 075
https://www.farmont.me/
Farmont doo Kosic; bb, Danilovgrad Montenegro

Implementation summary

PSD last updated

19 Aug 2024

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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Farmont Logistics Centre & Pharmacies Expansion

Overview

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Technical Cooperation and Grant Financing

Company Contact Information

Implementation summary

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)