PROJECT

Projects

Environmental & Social Review Summary

Project Number

46396

Company Name

EQUATORIAL COCA COLA BOTTLING COMPANY SL

Date ESRS Disclosed

Jun 27, 2022

Country

Africa Region

Region

Africa

Last Updated Date

Dec 30, 2022

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Dec 6, 2022
Signed : Dec 16, 2022
Invested : Dec 28, 2022

Sector

Soft Drink

Industry

Agribusiness and Forestry

Department

Regional Industry - MAS Africa

Project Description

Equatorial Coca Cola Bottling Company (“ECCBC” or “the company”), headquartered in Morocco, was founded in 1997 and is a bottling company for The Coca Cola Company (TCCC). ECCBC has been expanding over the years through acquisitions. Before its incorporation, the Company had been distributing TCCC products in West Africa since 1951, first in Equatorial Guinea and then in Guinea Conakry, Guinea Bissau, Mauritania, Cape Verde and the Gambia.

The company is now distributing TCCC products in 13 African countries, including Morocco, Algeria, Ghana, Guinea Conakry, Equatorial Guinea, Cape Verde, Liberia, Gambia, Mauritania, Sierra Leone, South Sudan, Bissau Guinea and Sao Tome and Principe with the largest markets being Morocco and Algeria. ECCBC produces, commercializes, and distributes five categories of beverages: carbonated soft drinks (CSD), juices, water, energy drinks and malt. ECCBC is a vertically integrated company from own production and warehousing assets, distribution managed by ECCBC and third-party partners, and commercialization through 3 channels - local vendors, supermarkets, and restaurants. The company reaches 100+ million consumers through 200,000+ points of sales. The company has currently 27 production lines and seven bottling plants – three in Morocco and one each in Algeria, Ghana, Guinea Conakry, and Cape Verde at the time of this appraisal.

The proposed investment is for a total of about €70million – senior loan of up to €53 million and up to €17  million loan (in US$ equivalent) from IFC as implementing entity for the Canada IFC Blended Finance Program (BCFP) - to support the company’s new investments and working capital requirements (“the Project”),  specifically for:

(a)      Upgrade of a production line in ECCBC’s Fruital plant in Algeria (located in Zone Industrielle Rouiba, Algiers) - referred to as “Fruital” or “Algeria” plant”. A new CSD production line with a capacity of 45,000 bottles per hour (bph) to increase production and replace volume from an existing line. The new production line will have a 25% reduction in electricity consumption to produce replaced volume and a reduction in the utilization of raw materials (e.g., the process will facilitate plastic bottle light-weighting).

(b)      New Packaged Drinking Water Line in ECCBC’s COBOMI plant in Morocco (within the Technopole of Mohammed V airport, on the outskirts of Casablanca) (referred to as “COBOMI” or “Morocco” plant). A new production line for water-based products, which will also replace an existing line with a capacity of 20,000 bph. The new line will significantly improve water efficiency and enable a reduction in plastic utilization compared to the existing line.

(c)       Upgradation of coolers in Ghana, Algeria and other West African Countries. Investment in purchasing 25,000 coolers to replace old coolers at the point of sales, which will be 25% more energy efficient.

(d)      Installation of solar panels in Ghana and Morocco plants.

  • Solar panels with 0.63 MWp capacity on a 2,700 m2 rooftop in Phase-1 and 1.1 MWp of solar panels on a 5,000 m2 rooftop in the COBOMI plant in Morocco.
  • Solar panels with 1 MWp capacity on a 6,000 m2 rooftop in Phase-1 and 0.4 MWp of solar panels in the Marrakesh plant in Morocco.
  • Solar panel installation in Ghana plant.

 

(e)      Pilot installation of off-grid solar coolers in Ghana.

The investment package will include a tranche for a Green Loan, subject to the review and recommended approval of an external reviewer.                                                 

Overview of IFC's Scope of Review

IFC’s review of this investment consisted of appraising information related to technical, environmental, health and safety and social (E&S) matters submitted by ECCBC including corporate policies, Sustainability (E&S) impact strategy, details of proposed capital expenditure (CAPEX), plant-level E&S management systems information, including hydrological studies, Human Resources (HR) policies and procedures, and resource efficiency Key Performance Indicators (KPIs).

Considering that the significant part of the CAPEX funded by this investment is dedicated for COBOMI and Fruital plants, the appraisal mainly focussed on these plants. The appraisal included a site visit to ECCBC’s COBOMI plant in April 2022 and meeting with the HR and plant manager. Given travel restrictions due to COVID-19, the IFC appraisal team could not travel to the Algeria plant. Virtual meetings were held with the plant team. Additionally, IFC conducted discussions with corporate ECCBC representatives from Public Affairs, Communications & Sustainability, Quality, Environmental, Occupational, Health and Safety (QEOSH) and HR departments. Considering the critical importance of water management aspects for this project, water related studies were reviewed by an IFC water specialist and discussions were held with World Bank water resources specialists in Morocco and Algeria to understand the current and future availability status of the water supplies for both plants.

IFC will visit the Algeria plant, upon lifting of COVID travel restrictions, to validate the appraisal findings as documented in this Environmental and Social Review Summary (ESRS) and as needed, will update the ESRS and the E&S Action Plan (ESAP) accordingly.                                                

Contextual risk screening was completed for the countries targeted by this investment. Morocco has high contextual risks (CRs) of gender-based violence (GBV). Ghana has high CR in ensuring gender balance in labor workforce: supply chain risks and access to basic services/infrastructure. In addition to the above mentioned CRs Algeria has high CR of land rights, community upheavals, and deforestation.

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan