A long-term loan of up to USD 50m (or the equivalent in TRY) in favour of Bunge Gida Sanayi ve Ticaret A.S. (the "Borrower"), a Turkish Borrower primarily engaged in the crushing, refining and bottling of branded and private label edible oils, to finance the Company's working capital needs and capital investments at Bunge's plants in Ayvalik and Thrace. In addition, EBRD and Bunge will partner in sustainability projects in the country.
The Project will enhance access to skills and economic opportunities for women farmers through the introduction of a training programme on more sustainable and productivity enhancing agricultural practices in olive farming. The Borrower will offer support and knowledge sharing to farmers on the use of climate smart practices in agriculture. The Bank will also support the Borrower to develop certified organic olive production by increasing the procurement of organic certified olive oil in Turkey, and supporting the launch of a technical cooperation assignment that will analyse the climate change resilience of the olive supply chain in order to identify areas of improvement in the carbon footprint of olive farming.
ETI score: 71
Primary transition impact is "Inclusive", as the Project will introduce a new, replicable and nationally accredited training programme, leading to improved skills for women olive farmers in Turkey. The aim is to provide farmers (with a focus on women) in the whole olive geography of Turkey with the farming skills needed to increase the efficiency and climate resilience of their harvest, all the while ensuring economically worthwhile, environmentally friendly production.
Secondary transition impact is "Green", as the Bank will engage with the Borrower to improve supply chain management through sustainable raw materials sourcing, which will enable improved resource efficiency, climate change resilience and environmental standards in the Borrower's operations and supply chain.
BUNGE GIDA SANAYI VE TICARET AS
The Borrower is an integrated edible oils producer based in Turkey, with four production facilities located in the Thrace, Marmara and Aegean regions, in Western Turkey. Bunge processes oilseeds, cereals, protein products and crushes, refines and bottles oilseeds to produce olive oil, sunflower oil, cooking oils, with well-known edible oil brands such as Komili, Kirlangic, and Sezai Omer Madra. The Borrower is a subsidiary of Bunge Limited, the world's leader in oilseed processing and a leading producer and supplier of specialty plant-based oils and fats, with more than 23,000 employees working across approximately 300 facilities located in more than 40 countries.
EBRD Finance Summary
Total Project Cost
In the form of long-term funding for working capital and capital investments.
Terms (provision of a longer tenor loan with an option to provide local currency financing), EBRD attributes (the project includes a technical cooperation assignment to provide training which will be externally accredited, higher inclusion standards through incorporation of a comprehensive training programme for farmers with a particular focus on female participants and better energy and resource efficiency standards through financing of GET-eligible investments).
Environmental and Social Summary
Categorised B (ESP 2019). The project includes the provision of working capital, sustainability projects for olive and olive oil sector, training for farmers, and selected capex expenditures in the Borrower's plants in Thrace and Ayvalik. Environmental and social due diligence comprised the completion of an E&S questionnaire by the Borrower, the submission of additional supporting documentation, review of the Bunge Global Sustainability Report 2020 and interviews with a range of staff across the three production facilities of Bunge in Turkey.
Key issues considered during due diligence included operational and resources efficiency issues at the individual plants, application of E&S management systems, human resource management including in relation to moving the production process in the current Korfez Plant to the Ayvalik Plant, and reporting processes both within the Borrower and publicly. The Borrower has a comprehensive approach to the management of E&S issues, which focuses primarily on two areas: compliance with national legal requirements, and; compliance with Bunge Global management systems and standards. Individual facilities can also choose to adopt formalised management systems such as ISO 14001 on environment or ISO 50001 on energy management. Adequate capacity for managing E&S issues is provided at multiple levels within Bunge worldwide, in Turkey and individual production facilities with all having dedicated staff for managing environmental, health & safety and labour issues. KPIs are in place across a range of issues and each production is audited on a regular basis for compliance with Bunge's global requirements and the agreed KPIs.
Human resource issues are likewise managed in accordance with local labour law, the Collective Agreement, and Bunge local & global procedures. As for environment, HR issues are comprehensively managed with written HR policies in place for all issues relevant to PR2. Significant for the sector and the country context is that the Borrower has a Collective Bargaining Agreement in place with a significant proportion of staff being members of the relevant sectoral union. This agreement is also important in the context of moving the production process in the current Korfez Plant to the Ayvalik Plant. Since the restructuring will involve significant changes for staff, a road map has been communicated both with union and the staff to ensure that a mutually agreeable process is in place again in accordance with national and Bunge's global requirements. Health and safety is managed in accordance with national requirements and Bunge's global procedures. Health and safety culture is strong across all facilities with appropriate management systems in place and the success of these systems demonstrated in the very low rates of accidents and incidents.
In terms of reporting, the Borrower produces a Sustainability Report that meets the Global Reporting Initiative (GRI) Standards, Core Option, whilst also aims to align with relevant indicators from the Sustainable Accounting Standards Board (SASB) and the Task Force on Climate Related Financial Disclosures (TCFD). That report is fed by regular reporting from local productions facilities that utilise a standard reporting format against the agreed KPIs. The GRI report is just part of the many stakeholder engagement activities undertaken by the Borrower at a range of levels. The Borrower has a system in place for the receipt of external grievances with a range of communications channels publicised.
Given the systems in place, and the nature of the project, no further actions are considered necessary for Bunge to achieve compliance with the Bank's performance requirements and hence no environmental and social action plan will be required. The Borrower will be required to continue application of its current approaches to ensure on-going compliance with the PRs and will also be required to provide annual environmental and social reporting to the Bank.
Technical Cooperation and Grant Financing
The Project is associated with two Technical Cooperation assignments:
The first one - SSF funded and with cost sharing with the Borrower - will support the Borrower in setting up a training academy that will enhance farmers' skills in olive production in collaboration with education providers. The second one funded by the Turkey-EBRD Cooperation Account with cost sharing with the Borrower - will analyse the climate change resilience of the olive supply chain aimed at identifying areas of improvement in the carbon footprint of olive farming.
Company Contact Information
+90 216 417 27 37
Kucukyali Mahallesi Aydinevler Sanayi Cad. Centrum Is Merkezi, D:3/301, 34854, Maltepe, Istanbul, Turkey
PSD last updated
08 Mar 2022
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