Provision of up to EUR 150 million sovereign loan (the "Loan") for the benefit of Office des Cereales ("ODC" or the "Company"). ODC is a Tunisian state owned office in charge of international and national procurement, storage, and sales and distribution of durum wheat, wheat, and barley in Tunisia. The Loan will finance ODC's working capital needs related to their international purchase of grains.
In light of the ongoing war on Ukraine and the disruption caused in international grain supply and record high prices, the bank aims to support the Tunisian government through the provision of a loan to ensure availability of liquidity for ODC's international grain purchases, and hence contribute to the country's food security. In parallel to financing, the Bank will also seek to mobilise a technical cooperation ("TC") package to (i) support ODC to increase the efficiency of its operations and adoption of best business and governance standards; and (ii) conduct a review of the Tunisian grain value chain and develop subsequently some recommendations addressing structural weaknesses in the Tunisian grain sector.
ETI score: 64
The transition impact of the Project is expected to derive from its contribution to the resilient and well-governed qualities. Through the proposed liquidity response, the Project supports food security in Tunisia by increasing the resilience of ODC to purchase internationally and import key agricultural commodities. Through the contemplated TC and policy advisory activities, the Project will also aim at (a) increasing the efficiency of ODC grain import logistical operations by looking at ways to reduce grain storage and handling losses, and (b) conducting a review of the Tunisian grain value chain and formulating some recommendations addressing structural weaknesses in the Tunisian grain sector.
Through the contemplated TC support, the Project also targets promoting best business standards with the ODC, resulting in increased corporatisation in the longer term, improved corporate governance and management and quality systems.
OFFICE DES CEREALES
Office des Cereales is a Tunisian state owned office in charge of international and national procurement, storage, and sales and distribution of durum wheat, wheat, and barley in Tunisia.
EBRD Finance Summary
Total Project Cost
EBRD is additional in terms of ability to provide timely liquidity to the ODC hardly available on the Tunisian market. Through the proposed TC and policy advisory, the Tunisian government will also seek use of EBRD expertise on achieving higher governance standards for the ODC, and improving the efficiency of the Tunisian grain value chain and the country's food security.
Environmental and Social Summary
Based on an initial assessment conducted back in 2017 in the context of a previous potential project with the ODC (to be updated in the context of the current project) the findings were as follows:
Categorised B (ESP 2014). The purchase of grains is associated with site-specific environmental and social risks which can be managed and mitigated through the implementation of a targeted action plan. An updated environmental and social due diligence will be undertaken and will include meetings with the Office Des Cereales (ODC)'s relevant departments and site visits to the relevant ODC sites.
Initial findings show that the Company is in compliance with environmental permitting procedures and has a number of fragmented environmental, health and safety, and social (EHSS) management measures that are in place both at the central and the sites level.
Accidents and incidents are reported on a regular basis, and corrective measures are identified. Nevertheless the system needs to be formalised and improved, and the EHS resources will also need to be enhanced in line with the EBRD requirements. The Company is generally in compliance with EBRD's PR2, and has a set of policies and procedures and an operational internal grievance mechanism procedure in place. An Environmental and Social Action Plan will be drafted and agreed with the Company to address issues identified during due diligence.
This PSD will be updated once the ESDD is completed, and a Non-Technical Summary and a Stakeholder Engagement Plan will be disclosed prior to Board approval.
Technical Cooperation and Grant Financing
Through the contemplated TC and policy advisory, the Project aims at conducting a review of the Tunisian grain value chain and formulating some recommendations addressing structural weaknesses in the Tunisian grain sector. It will also aim at promoting best business standards with the ODC entailing improved logistical operations, increased corporatisation, improved corporate governance, management and quality systems.
Company Contact Information
+216 70 557 300
+216 70 557 401
30 Rue Alain Savary, Tunis 1002, Tunisia
PSD last updated
19 May 2022
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