Al Dahra Morocco

Location:

Morocco

Project number:

50406

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

25 Oct 2019

Status:

Signed

PSD disclosed:

10 Oct 2019

Translated version of this PSD: ArabicFrench

Project Description

Provision of up to MAD 55m (EUR 5m equivalent) long-term loan to Al Dahra Morocco ("ADMO") and Al Dahra Morocco Factories ("ADFAC"), two companies organised in Morocco (together the "Co-Borrowers"). The Co-Borrowers are owned by Al Dahra Holding ("ADH" or  the "Sponsor"), a leading global agribusiness player, headquartered in Abu Dhabi, United Arab Emirates, and specialised in the cultivation, production and trading of animal feed and essential human food commodities such as rice, flour, fruits and vegetables.

Project Objectives

Proceeds from the Loan will enable the Co-Borrowers to finance the construction and commissioning of a new olive oil factory in the Fez-Meknes region in Morocco, for a total cost of up to MAD 55m (EUR 5m equivalent). The Project will enable Al Dahra to leverage on their existing olive farms in the Fez-Meknes region and aggregate other olive farmers in the region, to integrate downstream into production of olive oil mainly targeting the export market.

Transition Impact

The expected transition impact of the Project will derive from its contribution to the Competitive and Integrated qualities. Under the Competitive quality, the Co-Borrowers aim at improving their competiveness by adopting internationally accredited certifications for their olive farms, and by participating and benefiting from an ongoing EBRD-FAO initiative mainly focusing on competitiveness in the Moroccan olive oil sector. Under the Integrated quality, the Project supports the Co-Borrowers' expansion into the production of high quality olive oil mainly targeting export markets, and promotes further FDI in the Moroccan agribusiness sector.

Client Information

AL DAHRA MOROCCO SARL

Co-Borrowers: ADMO and ADFAC are dedicated to the farming and production of fruits and olives and will start shortly the production of olive oil.

Sponsor: Al Dahra Holding is a global agribusiness player, founded in 2005 with headquarters in Abu Dhabi, UAE. The Group has significantly grown since to become one of the largest global producers of alfalfa (main forage for livestock) and to diversify further into grains, rice, and fruits and vegetables production and trading. As a result, the Group has now presence in more than 20 countries and a global workforce of 5,000 employees.

EBRD Finance Summary

MAD 55,000,000.00

A loan of up to MAD 55,000,000.

Total Project Cost

MAD 55,000,000.00
MAD 55,000,000

Environmental and Social Summary

Category B (2014). Environmental and Social issues related to the Project are typical of those related to the development of a new olive oil factory on the site of existing olive oil farming operations.  Due diligence was conducted mainly in-house with a third party social assessment carried out with a focus on land acquisition and labour risks and impacts. The environmental and social risks and impacts associated with the olive farms and factory are limited and readily identified and managed through a set of measures summarised in an ESAP to be agreed with the Client prior to signing. 

Al Dahra Morocco (ADMO) and Al Dahra Morocco Factories (ADFAC) currently do not have formal environmental and social (E&S) management systems or sufficient capacity in place to systematically identify, avoid or mitigate, and monitor E&S risks and impacts. Similar gaps are observed at the corporate level, and Al Dahra Holding have expressed an interest to work with EBRD to develop a corporate E&S policy framework and increase corporate capacity, enabling them to roll-out E&S management systems to their national operations consistent with the corporate approach. The Moroccan farming operations are being developed to receive Global GAP certification by 2021, which will provide an improved level of alignment with ESMS requirements, as well as environmental, health and safety and labour standards under the EBRD's Performance Requirements, but further alignment with EU environmental standards will need to be achieved. ADMO and ADFAC will need to ensure that relevant E&S requirements are also extended to their contractors, labour providers and suppliers. The independent Rapid Social Assessment established that labour and land acquisition risks related to the two olive farms are limited and that ADMO practice has been adequate, though not sufficiently formalised in Human Resources and recruitment policies, as well as land acquisition protocols. These will need to be developed for both ADMO and ADFAC.

An ESAP has been developed to ensure the development of comprehensive E&S management systems and processes at the corporate and national level. The Co-Borrowers will be required to align with EBRD standards on environmental and social assessment and management, labour and working conditions, and land acquisition, as well as EU and international standards related to water use, soil and pest management, chemicals and waste handling for both olive crop production and processing. Further to this, the ESAP requires the development of an Ethical Recruitment Policy, a Biodiversity Management Plan as well as a Stakeholder Engagement Plan and Grievance Mechanism.

Technical Cooperation

None.

Company Contact Information

Gianluca Elmosi
gianluca.elmosi@aldahra.com
+971 2 656 5078
+971 2 656 5078
www.aldahra.com
Al Ain Tower, 130455, Abu Dhabi, UAE

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