Bunge Turkey

Location:

Turkey

Project number:

52681

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

15 Dec 2021

Status:

Disbursing

PSD disclosed:

08 Mar 2022

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

A long-term loan of up to USD 50m (or the equivalent in TRY) in favour of Bunge Gida Sanayi ve Ticaret A.S. (the "Borrower"), a Turkish Borrower primarily engaged in the crushing, refining and bottling of branded and private label edible oils, to finance the Company's working capital needs and capital investments at Bunge's plants in Ayvalik and Thrace. In addition, EBRD and Bunge will partner in sustainability projects in the country.

Project Objectives

The Project will enhance access to skills and economic opportunities for women farmers through the introduction of a training programme on more sustainable and productivity enhancing agricultural practices in olive farming. The Borrower will offer support and knowledge sharing to farmers on the use of climate smart practices in agriculture. The Bank will also support the Borrower to develop certified organic olive production by increasing the procurement of organic certified olive oil in Turkey, and supporting the launch of a technical cooperation assignment that will analyse the climate change resilience of the olive supply chain in order to identify areas of improvement in the carbon footprint of olive farming.

Transition Impact

ETI score: 71

Primary transition impact is "Inclusive", as the Project will introduce a new, replicable and nationally accredited training programme, leading to improved skills for women olive farmers in Turkey. The aim is to provide farmers (with a focus on women) in the whole olive geography of Turkey with the farming skills needed to increase the efficiency and climate resilience of their harvest, all the while ensuring economically worthwhile, environmentally friendly production.

Secondary transition impact is "Green", as the Bank will engage with the Borrower to improve supply chain management through sustainable raw materials sourcing, which will enable improved resource efficiency, climate change resilience and environmental standards in the Borrower's operations and supply chain.

Client Information

BUNGE GIDA SANAYI VE TICARET AS

The Borrower is an integrated edible oils producer based in Turkey, with four production facilities located in the Thrace, Marmara and Aegean regions, in Western Turkey. Bunge processes oilseeds, cereals, protein products and crushes, refines and bottles oilseeds to produce olive oil, sunflower oil, cooking oils, with well-known edible oil brands such as Komili, Kirlangic, and Sezai Omer Madra. The Borrower is a subsidiary of Bunge Limited, the world's leader in oilseed processing and a leading producer and supplier of specialty plant-based oils and fats, with more than 23,000 employees working across approximately 300 facilities located in more than 40 countries.

EBRD Finance Summary

USD 50,000,000.00

Loan

Total Project Cost

USD 50,000,000.00

In the form of long-term funding for working capital and capital investments.

Additionality

Terms (provision of a longer tenor loan with an option to provide local currency financing), EBRD attributes (the project includes a technical cooperation assignment to provide training which will be externally accredited, higher inclusion standards through incorporation of a comprehensive training programme for farmers with a particular focus on female participants and better energy and resource efficiency standards through financing of GET-eligible investments).

Environmental and Social Summary

Categorised B (ESP 2019).  The project includes the provision of working capital, sustainability projects for olive and olive oil sector, training for farmers, and selected capex expenditures in the Borrower's plants in Thrace and Ayvalik. Environmental and social due diligence comprised the completion of an E&S questionnaire by the Borrower, the submission of additional supporting documentation, review of the Bunge Global Sustainability Report 2020 and interviews with a range of staff across the three production facilities of Bunge in Turkey.

Key issues considered during due diligence included operational and resources efficiency issues at the individual plants, application of E&S management systems, human resource management including in relation to moving the production process in the current Korfez Plant to the Ayvalik Plant, and reporting processes both within the Borrower and publicly. The Borrower has a comprehensive approach to the management of E&S issues, which focuses primarily on two areas: compliance with national legal requirements, and; compliance with Bunge Global management systems and standards. Individual facilities can also choose to adopt formalised management systems such as ISO 14001 on environment or ISO 50001 on energy management. Adequate capacity for managing E&S issues is provided at multiple levels within Bunge worldwide, in Turkey and individual production facilities with all having dedicated staff for managing environmental, health & safety and labour issues. KPIs are in place across a range of issues and each production is audited on a regular basis for compliance with Bunge's global requirements and the agreed KPIs.

Human resource issues are likewise managed in accordance with local labour law, the Collective Agreement, and Bunge local & global procedures. As for environment, HR issues are comprehensively managed with written HR policies in place for all issues relevant to PR2. Significant for the sector and the country context is that the Borrower has a Collective Bargaining Agreement in place with a significant proportion of staff being members of the relevant sectoral union. This agreement is also important in the context of moving the production process in the current Korfez Plant to the Ayvalik Plant. Since the restructuring will involve significant changes for staff, a road map has been communicated both with union and the staff to ensure that a mutually agreeable process is in place again in accordance with national and Bunge's global requirements. Health and safety is managed in accordance with national requirements and Bunge's global procedures. Health and safety culture is strong across all facilities with appropriate management systems in place and the success of these systems demonstrated in the very low rates of accidents and incidents.

In terms of reporting, the Borrower produces a Sustainability Report that meets the Global Reporting Initiative (GRI) Standards, Core Option, whilst also aims to align with relevant indicators from the Sustainable Accounting Standards Board (SASB) and the Task Force on Climate Related Financial Disclosures (TCFD). That report is fed by regular reporting from local productions facilities that utilise a standard reporting format against the agreed KPIs. The GRI report is just part of the many stakeholder engagement activities undertaken by the Borrower at a range of levels. The Borrower has a system in place for the receipt of external grievances with a range of communications channels publicised.

Given the systems in place, and the nature of the project, no further actions are considered necessary for Bunge to achieve compliance with the Bank's performance requirements and hence no environmental and social action plan will be required. The Borrower will be required to continue application of its current approaches to ensure on-going compliance with the PRs and will also be required to provide annual environmental and social reporting to the Bank.

Technical Cooperation and Grant Financing

The Project is associated with two Technical Cooperation assignments:

The first one - SSF funded and with cost sharing with the Borrower - will support the Borrower in setting up a training academy that will enhance farmers' skills in olive production in collaboration with education providers. The second one funded by the Turkey-EBRD Cooperation Account with cost sharing with the Borrower - will analyse the climate change resilience of the olive supply chain aimed at identifying areas of improvement in the carbon footprint of olive farming.

Company Contact Information

Erdem Yildiz
erdem.yildiz@bunge.com
+90 216 417 27 37
https://www.bunge.com
Kucukyali Mahallesi Aydinevler Sanayi Cad. Centrum Is Merkezi, D:3/301, 34854, Maltepe, Istanbul, Turkey

PSD last updated

08 Mar 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

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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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