Olam Regional WC Financing

Location:

Regional

Project number:

51526

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

23 Jul 2020

Status:

Signed

PSD disclosed:

17 Jun 2020

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

Provision of a USD 200 million loan to Olam International Ltd ("Olam" or the "company"), in order to provide stable financing of the working capital needs of the company in Turkey, Egypt, Georgia, Poland and Ukraine (the "project countries").

 

Project Objectives

The loan will be used to finance the sourcing, processing, storage and transportation of agricultural commodities such as nuts, grains, dairy products and dried vegetables across these countries.

Transition Impact

ETI score: 63

The transition impact stems from the following two transition qualities: 
  

  • Competitive (primary): The company will add a significant number of new suppliers to selected value chains in EBRD countries of operations. Particular emphasis will be given to improvements in the quality of crops including nuts and onions, better linkages to suppliers and improvements in environmental and social standards. This will build on, and expand, Olam's success in helping farmers implement sustainable agricultural practices achieved under a previous project with the EBRD.
  • Well governed (secondary): Olam and the EBRD will engage in a high-level dialogue for enhanced corporate governance for climate action. This joint effort will focus on (i) integration of climate change scenarios into business strategy by stress-testing priority value chains in EBRD countries of operations under different climate change scenarios, (ii) adoption of practices for identifying and managing climate-related risks and opportunities, (iii) adoption of practices for the disclosure of information about climate-related risks and opportunities.

Client Information

OLAM INTERNATIONAL LIMITED

Olam International Ltd, established in Singapore, is a leading global food and agri-business enterprise, supplying food ingredients, feed and fibre to thousands of customers worldwide. EBRD funds will be provided to Olam International Ltd and its subsidiary Olam Treasury Pte Ltd. The borrowers will on-lend the loan proceeds to the company's subsidiaries in Georgia, Egypt, Poland, Turkey and Ukraine.

Olam International Ltd is 53.4% owned by Temasek Holdings, 17.4% by Mitsubishi Corporation, 7% by Kewalram Chanrai Group and 6.3% by Olam management. Other institutional investors and the public own the remaining 15.9%.

EBRD Finance Summary

USD 200,000,000.00

USD 200 million

Total Project Cost

USD 200,000,000.00

USD 200 million

Additionality

The EBRD provides expertise in climate corporate governance improvement that is not available from commercial banks. The EBRD loan also supports the company in diversification of its funding sources and provides alternative financing structure for working capital needs in the project countries.

 

Environmental and Social Summary

The Project was categorised B according to the EBRD's Environmental and Social Policy (2019). Through due diligence on the previous transaction it is known that Olam International have a progressive approach to sustainable supply chain management and a number of their products have achieved environmental and/or social certification. In addition, Olam are fully committed to complying with the Bank's PRs.
Given potential supply chain risks for agricultural commodities, the Bank's Environmental and Social Due Diligence ("ESDD"), which is ongoing, will include interviews with CSR management and review of documentation provided and will cover issues such as supply chain management, grievance mechanisms in place, labour, sustainability standards, occupational health and safety and waste management.

The PSD will be updated after the results of the ESDD.

 

Technical Cooperation and Grant Financing

The project will have the following Technical Cooperation (TC) components:
  

  • Assessment of climate risks and opportunities in two priority value chains in Turkey and Egypt funded by the Taiwan Business - EBRD Technical Cooperation Fund.
  • Provision of dedicated trainings to farmers in a priority value chain in Egypt to support improvements in agricultural practices and climate resilience funded by EU-EBRD Trade and Competitiveness Programme.

Company Contact Information

Venkataraman Krishnan
k.venkat@olamnet.com
+6563394100
http://olamgroup.com/

PSD last updated

17 Jun 2020

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 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 the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social 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 additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from 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 activities of the Bank 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 Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both 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. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. 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 sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. 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 (e.g. 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 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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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