RSF - Priorbank Kolos Working Capital Line

Location:

Belarus

Project number:

51455

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

15 Oct 2019

Status:

Board Approved

PSD disclosed:

12 Nov 2019

Translated version of this PSD: Russian

Project Description

Agrokombinat 'Kolos' CJSC ("Kolos", the Company, the Borrower) is a private family owned Belarusian agricultural holding engaged in manufacturing and distribution of processed meat products since 2003. In the proposed transaction EBRD and Priorbank (Belarus) jointly provide (50:50) a €1.0mln. working capital loan to the Company.

Project Objectives

The Loan will finance working capital needs of the Company in support of its production expansion program.

Transition Impact

Transition Impact of the project is measured at the level of the EBRD's Risk Sharing Framework (RSF), which targets the following objectives:

Resilient: Transition impact under the RSF is mainly expected to derive from skills transfer to the Partner Bank, in the areas of financial analysis, risk assessment and project management.

Competitive: RSF facilitates access to finance for SMEs, supporting their growth and competitiveness.

Client Information

AGROKOMBINAT KOLOS CJSC

EBRD Finance Summary

EUR 500,000.00

Total Project Cost

EUR 1,000,000.00

Environmental and Social Summary

Category B (2014 ESP). An issue was identified during the due diligence related to the current animal welfare practices involving forced feeding (FF) of ducks for the foie gras production, and the associated biosecurity issue related to breeding ducks and chickens at the same site in Stolbtsy. To address these issues and improve the Borrower's animal welfare practices in line with the EU requirements, a corrective Environmental and Social Action Plan and Animal Welfare Action Plan will be implemented during the project. The Partner Bank has prepared the EBRD's ESDD questionnaire on the Borrower, and an independent animal welfare audit was carried out in 2018, which indicates overall compliance with the national EHS practices, permits and regulations. Earlier in 2019, the Borrower also purchased a new site to allow for the transfer of all duck-related operations to this new site and address any existing biosecurity risks. The RSF loan will have conditions such that (i) no funding from the RSF working capital loan will go to activities related to the forced feeding or foie gras production, and (ii) the Borrower will commit to abolish FF practices by the end of 2020. The Partner Bank will need to monitor E&S performance of the Borrower annually and share their findings with the EBRD's ESD. Monitoring visits by ESD or independent consultants will be carried out if and when required.

Technical Cooperation

None.

Company Contact Information

Eugene Komandyshko, CFO
e.komandyshko@kolosbel.by
+375 17 39-39-571
www.kolosbel.by
220114, 55 Filimonova Str., Minsk, Belarus

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