Provision of a long-term loan (the "loan") of up to EUR 34m to Al Dahra Serbia ("ADS"), a vertically integrated agribusiness company with operations near Belgrade, Serbia.
ADS is owned by Al Dahra group of companies (the "Group" or "Al Dahra"), 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.
Proceeds from the loan will enable ADS to finance investments in crop farming improvements, a new alfalfa factory, an animal feed factory and modernisation of its dairy farms operations.
These investments aim at enhancing and optimising ADS' crop farming operations including through significantly enlarging the irrigated area, and modernising ADS' dairy operations with the aim of improving the quality of milk and the milk yield through the replacement of the old dairy farms withstate-of-the-art new ones.
These investments aim finally to expand ADS' business in relation to the processing of alfalfa, hence creating more value in ADS, and initiating its export activity, positioning ADS and Serbia as a key origination country in the global alfalfa market.
ETI score: 59
The project's transition impact is expected to derive from the Competitive and Well-Governed qualities by: (i) supporting ADS to implement operational changes leading to competitiveness improvements; and (ii) in the context of the project, Al Dahra will address specific gaps in its climate governance practices and make important first steps towards establishing a robust and transparent Corporate Climate Governance ("CCG") framework.
AL DAHRA SERBIA DOO
ADS is a vertically integrated agribusiness company involved in primary agriculture activities, livestock and dairy farming.
Al Dahra is a global agribusiness player, founded in 2005 with headquarters in Abu Dhabi, UAE.
EBRD Finance Summary
The EUR 34m include committed and uncommitted tranches.
Total Project Cost
Risk Mitigation: (i) EBRD helps the client to mitigate climate governance risks and take climate action, such as to improve its internal corporate governance for managing climate risks; (ii) EBRD support provides comfort to the client to invest further into recently penetrated countries such as Serbia and Romania. The Group views the Bank as a strategic partner in Romania and Serbia and other common countries of operations.
Standard-setting: Client seeks/makes use of EBRD expertise on corporate governance improvements, including for climate risk management.
Environmental and Social Summary
Categorised B (2019 ESP). The expansion of irrigation systems and modernisation of dairy operations is not anticipated to be associated with any significant environmental and social (E&S) risks or impacts. An independent assessment of ADS' current E&S performance and project E&S risks and impacts, including an animal welfare assessment, are currently underway, carried out in line with the Covid-19 approach through remote documentation review, interviews with company management and review of video footage and photographs provided by the company. The company's operations have been identified as having greenhouse gas emissions in excess of 100,000 of CO2-equivalent annually, and therefore a separate assessment of current and future GHG emissions is also ongoing.
The company is in the process of rolling-out their corporate environmental and social management system to their Serbian operations and a review of the loan to Al Dahra Morocco, signed in December 2019, has confirmed that progress made in the implementation of the corporate-level ESAP measures has been swift and extensive.
Early findings from the animal welfare assessment indicate that ADS currently has just over 7,000 milking cows and a total number of 16,800 cattle. Operations are conducted on five separate farms in the same local area, including one large and modern facility, and four smaller, more traditional operations. The project includes the development of new facilities for 5,000 milking cows at one of the smaller operations where there are currently 1,400 cows. All cattle are housed permanently indoors with no outdoor access for grazing. Animal feed is from the company's own feed mill and fodder crops, and water is from borehole sources. The farms maintain good records on medicines, and biosecurity measures are in place. The company has experienced leadership, though recruitment and retention difficulties have resulted in a shortage of qualified staff. Although not prohibited by EU legislation, an issue arises from the tethering system for cattle on the four smaller farms, which is not in line with good practice. This will need to be addressed through appropriate plans for phasing out such practices in due course.
An environmental and social action plan will be developed based on the findings of the assessment and the PSD will be updated to provide more details of the outcomes of the E&S appraisal process and GHG assessment in due course.
Company Contact Information
+971 2 656 5078
+971 2 656 5078
Al Ain Tower, 130455, Abu Dhabi, UAE
PSD last updated
17 Jun 2021
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