DFF - Profi Expansion

Location:

Romania

Project number:

52076

Business sector:

Agribusiness

Notice type:

Private

Approval date:

11 May 2021

Status:

Approved

PSD disclosed:

18 May 2021

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

Up to RON 77.5 million (circa EUR 15.7 million equivalent) senior unsecured 5-year loan, including 2.5 years grace period. 

Project Objectives

The loan will support the financing of the company's capex and permitted acquisitions programme in 2021 - 2025, consisting of new stores opening, refurbishments and warehouse investments.

Transition Impact

ETI score: 64

Transition Impact arises from the "competitive" and "inclusive" qualities. The project will lead to additional product penetration in new and underserved areas, mainly outside of major urban centres, as well as local suppliers improving the quality of their products through training and consultancy from Profi's in-house agronomists. The project will also enhance digital and financial literacy as well as operational skills among people living in remote regions, as training will be provided to Profi's new employees and store managers.

Client Information

PROFI ROM FOOD SRL

Profi Rom Food SRL ("Profi", "Company", or the "Borrower"), one of the leading food retailers in Romania, with 1,404 stores as of December 2020. The company is owned by MEP Retail Luxco Sarl, holding entity for the Profi investment, incorporated in Luxembourg.

Profi is ultimately majority owned by private equity group Mid Europa Partners ("MEP") via its managed fund Mid Europa Fund IV ("MEP Fund IV"). In 2017, EBRD invested alongside Mid Europa Fund IV a EUR 25 million equity stake to further support the expansion of the network.

EBRD Finance Summary

RON 77,500,000.00

Total Project Cost

RON 190,000,000.00

Additionality

The Bank's additionality stems from setting higher standards on inclusion and gender, as the client will introduce a communication campaign, aimed at speaking out against gender based violence and harassment across its stores.

Environmental and Social Summary

Categorised B (ESP 2019). The construction and operation of supermarkets is associated with a number of environmental and social (E&S) issues, which are well understood and readily managed with standard mitigation measures. As an existing client of the Bank, the company is familiar with the Bank's E&S requirements and has been subject to an environmental and social action plan (ESAP) in the past. Progress on implementing all the requirements of the ESAP continues.

The company has in place a structure and staffing for management of E&S issues, including specialists to covers environmental, health and safety, food safety, and human resource management. Daily Environment, Health and Safety (EHS) operations at the stores are overseen by store managers, area sales managers, regional directors and ultimately the Operations Director. The company has also formed an Occupational Health & Safety (OHS) Committee that includes representatives from the general workforce, the OHS service provider and the HR departments. The company has developed an EHS training programme which utilises internal & external resources to conduct practical and theoretical training. All members of staff complete EHS training which includes topics such as OHS, life and fire safety, and emergency preparedness & response.

In accordance with the national legislation, environmental impact assessments (EIA) are not required for any of the company's facilities due to the small size of its stores. The E&S assessment for any proposed new store or distribution center being developed by Profi follows the legal requirements of the national and local authorities. The company is required to obtain all required permits & licenses (e.g. environment permits, fire permits, building permits, functioning permits), and these are to remain valid whilst operations are ongoing.

Profi has developed and implemented a number of standard operating procedures to manage its operational E&S and OHS risks in line with local regulatory requirements. The procedures comprise of waste management, occupational health and safety, hazardous materials management, and fire safety. The company is also implementing a food safety & traceability regime which is generally aligned with Hazard Analysis and Critical Control Point (HACCP) principles and continuously control foodborne illness risks.

To ensure ongoing compliance with the Bank's Performance Requirements the Bank has drafted an updated ESAP. The updated ESAP continues on from previously agreed plans and harmonises with the ESAP agreed between the company and IFC. The ESAP focuses on continued development of management systems covering environment, human resource, traffic safety and supply chain management. The ESAP will be agreed prior to signing of the project and the company will be required to provide annual E&S reporting on the implementation of the ESAP and other E&S matters.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Adina Andreescu
fraceaa@ebrd.com
0212027115
www.profi.ro
Calea Sever Bocu, nr. 31, Timisoara

PSD last updated

18 May 2021

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 more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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