Provision of an additional long-term loan to Varroc Lighting Morocco (VLS Morocco), a tier-1 automotive component company incorporated in Morocco, to finance its operations at the Tangiers Automotive City (TAC).
The Project supports the expansion of VLS Morocco's recently finished greenfield automotive lighting manufacturing facility and comes after the company won additional orders from its OEM customers.
This is the Bank's second project with VLS Morocco. In June 2018, the Bank helped finance the establishment of the new facility.
Inclusion: The Project will promote access of women and young people to economic opportunities by increasing female participation in a male-dominated sector and by supporting the establishment of a new cooperation programme with a local education provider.
Competitiveness: The project will introduce various quality standards which will be internationally accredited (e.g. ISO certification) and that are currently not widespread in the sector in Morocco.
VARROC LIGHTING SYSTEMS MOROCCO SA
VLS Morocco is ultimately owned by Varroc Engineering Limited, a global tier-1 automotive component group, established in India and involved in the design, manufacturing and supply of exterior lighting systems, electricals-electronics components, and precision metallic components.
Environmental and Social Summary
Category B (2014 ESP). VLS is an existing Client of the Bank and has demonstrated satisfactory compliance with the Bank's E&S Performance Requirements thus far. E&S Due Diligence (ESDD) has been undertaken by ESD through discussions with VLS's relevant representatives and a documentation review. ESDD confirmed that the Project is associated with Environmental, Health and Safety and Social (EHSS) risks that are site specific and can be managed and mitigated through the implementation of standard industry practices. The Company has a sophisticated and well developed series of EHSS risk management policies and practices and these are appropriate for the proposed new facility in Morocco. The Company operates globally to standards which meet the Bank's Performance Requirements. These standards are going to be implemented to the new facility, which the Client has committed to through the agreed updated E&S Action Plan.
The Company operates globally under management systems certified to ISO14001 and OHSAS 18001 and this accreditation will be obtained in Morocco when the plants become operational. These risk management systems are subject to audit by the client's customers to further evaluate their standards against international best practice. Risk management staff are present at the corporate level and on-site at the operational level. The new facility is located in an Industrial zone, with all utilities supplied to the site via municipal networks.
Construction contractors will be required to qualify and operate to Varroc's global standards for EHSS issues, and their performance will be managed at all times by on-site Varroc engineers with appropriate authorisations to amend and halt working practices which do not meet the required standards.
VLS Morocco operates a common standard in relation to employment conditions and these have been found to be in line with the Bank's PR2.
The ESAP has been updated to include the new Project with VLS Morocco. The Company's compliance and E&S performance will be monitored through the review of annual reports submitted by the Client.
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