The proposed financing will contribute to Boni Holding’s mid-term investment programme consisting of value chain improvements in its pig-breeding and meat-processing operations.
The acquisition of equipment and the refurbishment of existing and newly-acquired pig farms are expected to increase breeding capacity, improve microclimate and feeding systems, secure the raw material supply chain, and drive down direct production costs.
The Bank’s investment will promote transparency, high standards of corporate governance and maintenance of good business practice throughout the company’s operations. The Bank’s financing will help Boni Holding to upgrade its processes along the whole production chain and to exceed current EU pig-breeding standards. The proposed investments will reduce animal sickness and mortality rates and will also improve living conditions for breeding animals, quality of animal feed, and breeding efficiency.
Boni Holding AD, one of the largest integrated meat producers in Bulgaria.
EUR 10.5 million long-term loan.
Up to EUR 20 million.
Categorised B. This project was subject to an Initial Environmental and Social Examination (IESE) to confirm whether or not there were any elements of the project likely to trigger a Category A classification. Independent consultants were employed, in accordance with a Terms of Reference (TOR) provided by the Bank, to undertake a number of tasks including a corporate review of environmental, health and safety management, confirmation as to the status of development at two of the company’s farms, and the development of an environmental and social action plan (ESAP). The due diligence process included a detailed review of the project against EU requirements for animal welfare. This element of the due diligence programme was undertaken by an animal welfare specialist attached to the due diligence team.
Based on the information provided the project has been confirmed as a Category B. This takes into the account the fact that the sites are being developed on brownfield land, there is no change of use of the sites (previously both pig farms), the project will involve refurbishment of existing buildings only, there is no expansion or extension at the existing sites, the total number of animals at the farms will not exceed past numbers, and that sites are located in rural areas with no sensitive receptors in close proximity (bodies of water or residential properties).
The overall conclusion of the consultants is that the potential environmental and social impacts associated with the project have been appropriately assessed and that there are unlikely to be any significant adverse impacts. For the pig farms Tetrahib and Brestak and the new slaughterhouse in Lovech the company will commission environmental impact assessments in accordance with Bulgarian law. This process has been initiated for Tetrahib and Brestak with TORs developed and placed in the public domain for consultation. The Bank’s consultants have recommended that some additional items be taken into consideration during the EIA process and these recommendations have been integrated into the ESAP. To ensure that appropriate public consultation is undertaken the Company will be required to develop and implement a Stakeholder Engagement Plan and release non-technical summaries of the project to any potentially affected public / communities.
A number of environmental, health and safety, and animal welfare improvements have been identified during due diligence. For the environment these include the lack of corporate level environmental planning and management, the need to develop a manure management and storage improvement programme and the need to undertake a Best Available Techniques (BAT) review for management of ammonia and methane. For health and safety, issues include an assessing the risks associated with meat processing e.g. cutting of carcasses and the need for improved documentation and reporting on accidents and near misses. In terms of animal welfare the animals observed were in good condition at the Boni sites and showed evidence of appropriate levels of welfare. A number of recommendations have been provided to align animal welfare with European Union standards including a review of housing to ensure EU minimum space allowances, development of programme for providing environmental enrichment objects across all sites, replacement of damaged flooring, provision of dry, comfortable bedded areas within hospital/sick/injury pens and development of a programme for inspection of automated or mechanical equipment essential for the well-being of animals.
The recommendations to address the observed issues above have been integrated into a comprehensive ESAP covering corporate EHS actions, EHS actions specific to each site, and action covering animal welfare improvements at all pig farms. The ESAP has been reviewed by, and agreed with, the Company and is structured to ensure compliance with the Bank’s PRs and, in particular, EU standards. The Company will be required to provide regular reporting on key EHS issues and on the implementation of the ESAP.
Hristo Stoyanov, Finance Director
Tel: + 359 2 846 37 33
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