DFF - Dolidol Morocco II

Location:

Morocco

Project number:

53040

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

06 Jul 2021

Status:

Approved

PSD disclosed:

18 Aug 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

Provision of a EUR 10 million senior secured loan with a maturity of 7 years (including 2 years of grace period). The proceeds will be used to finance a new green capex plan to improve vertical integration. 

Project Objectives

The Project will enable the client to lower the cost of raw materials thanks to higher vertical integration through the in-house production of inputs. In addition, the Project will generate additional external annual revenues from sales of regenerated mattress and pillows fillers to other industrial producers with an attractive profitability. 

Transition Impact

ETI score: 65

Green: the Project is 100% GET. It is a new technology implemented in the country, where a home furniture manufacturer adopts a circular sourcing strategy for its raw materials supply.

Competitive: the Project will improve the client's cost-competitiveness thanks to higher vertical integration, whereby inputs are produced in-house. External sales of regenerated mattress and pillows fillers will generate additional revenue streams.

Client Information

UNI CONFORT MAROC - DOLIDOL SA

Uni Confort Maroc Dolidol ("Dolidol" or the Borrower), a company incorporated in Morocco, and a leading producer of foam and mattresses for home furnishings. The Borrower is 77% owned by Palmeraie Holding, a Moroccan conglomerate; and 23% owned by DPI, a large pan-African private equity fund. Palmeraie Holding is fully owned by the Berrada Sounni family.

EBRD Finance Summary

EUR 10,000,000.00

The proceeds of the Bank will finance a green capex in Morocco for the production of mattress and pillows fillers to be used as an input in mattresses and other bedding products

Total Project Cost

EUR 10,000,000.00

The EBRD provides all the financing for the Project.

Additionality

The Bank is additional through a financing structure which is not easily available in the market and which is required to structure the project; the long-term relationship with the client allowing to take on more risks; and EBRD's expertise in energy and resource efficiency and climate resilience.

Environmental and Social Summary

Categorised B (2019 ESP). The Environmental and Social (E&S) risks and impacts associated with construction and operation of a recycling plant to transform used PET plastic bottles into polyester fibres have been readily identified. In-house due diligence was carried out by means of review of a questionnaire and information package supplied by the Client, review of annual reports from the previous transaction, and follow-up Q&A with management interviews. The results of the ESDD indicated that the Company is well managed and has the internal capacity to operate in line with the Performance Requirements. An additional ESAP, specific to the recycling plant has been prepared and will be agreed with the Client before signing.

 

The Client has in place an integrated management system for the existing plant (ISO 45001 certification obtained in April 2021 and ISO14001 certification ongoing targeted by December 2021) that will be extended to cover the new activities. An Environmental Impact Assessment was prepared according to national requirements and the environmental permit for was received in 2021.

 The existing HR Policy, in line with the Moroccan Labour Code, will apply to the new hired staff. The ESAP requires the addition of a GBVH component to this Policy. The PET bottles will be sourced from aggregators on the local market. Considering that these supply chains (collection of used plastic bottles) can have potential child labour involvement, the Company will, as required in the ESAP, conduct a screening before initiating local sourcing to identify such risk, include specific requirements in the contracts signed with the supply chain partners, conduct regular monitoring, and develop a remedial action plan if relevant. The existing environmental monitoring system will be extended to cover the Company's emissions (gas boiler, wastewaters, noise). The ESAP requires installation of oil separators for rainwaters, as well as the revision of the Emergency Response Plan.

Regular safety tours are conducted for the Morocco operations by the HSE supervisors; they include the ongoing construction activities.

The new plant is being built within the land already owned by Dolidol in the same industrial park as the existing plant; there is therefore no need for land acquisition and no additional footprint.

The Bank will monitor implementation of the additional ESAP through review of annual Environmental and Social Reports (AESR) and communications with the Company as necessary.

Technical Cooperation and Grant Financing

The Project benefits from a first loss risk cover and TC for project preparation from the European Fund for Sustainable Development (EFSD).

The programme contributes to transitioning economies in the European Neighbourhood South and European Neighbourhood East by supporting sustainable investments in green city infrastructure, greening logistics chains, energy efficiency and green technology transfers in industrial processes, commercial operations and buildings.

Company Contact Information

Chakir ELHAJJI
celhajji@pid.ma

PSD last updated

18 Aug 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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