Biosev is the world’s second largest sugar and ethanol producer and one of the world’s largest renewable biomass electricity providers. The Company is vertically integrated, participating in all stages of the sugar and ethanol chain: planting, harvesting, processing, storage, logistics and commercialization. It started operations in 2000 by acquiring a small mill in the state of São Paulo and, since then, increased its crushing capacity to currently 36.4 million tons in 11 mills.

The Company is part of the Louis Dreyfus Commodities Holdings group (“LDCH” or “Group”), a leading global integrated commodity merchandizer and processor of agricultural products with operations in more than 100 countries. The Group was founded in 1851 and has been present in Brazil for the last 71 years, is active in a wide variety of agricultural and non-agricultural commodities.

Biosev is a public company with shares listed at the “Novo Mercado” of the São Paulo Stock Exchange since April 2013. This is the segment with the highest standards of corporate governance. Currently, LDCH and officers/ board members hold 76.7% of the Company’s shares, with remaining being free float.

To support the implementation of the investment program, IFC is considering providing up to BRL 128.2 million (approximately US$50 million equivalent) through an equity investment.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	50.0

* These investment figures are indicative

The Project consists of a corporate-wide investment program. All Biosev’s mills are located in Brazil and are grouped in four clusters, as follows:
Ribeirao Preto cluster, located in the Northern part of the State of Sao Paulo, composed of four mills;
Mato Grosso do Sul cluster, located in Cerrado biome, with three mills,
Leme – Lagoa da Prata cluster, which includes one mill in the State of Sao Paulo and another mill in the State of Minas Gerais;
Northeast cluster, with one mill located in State of Rio Grande do Norte and another in State of Paraiba.

The proposed investment will be supporting a leading player to optimize its sugarcane, sugar, ethanol and energy production. The Project is expected to have the following key developmental impacts in the local economy:

i. Impact on frontier regions: By supporting the Company''s growth plan in frontier regions, the Project will foster economic development by increasing agricultural production and ensuring the maintenance of around 60,000 direct and indirect jobs in areas which are highly dependent on the agricultural sector for income generation.

ii. Third party cane growers and land owners: because Biosev leases a significant amount of land from which its sugarcane is planted, its operations are a source of revenue and access to market for the owners and producers of about 538,000 ha of land from which sugarcane is sourced. About 37 percent of Biosev''s sugarcane is procured from 1,300 independent sugarcane farmers, the remainder is produced on approximately 340,000 ha of land leased from local land owners.

iii. Energy security from a renewable source: Biosev will increase the production of electricity generation from biomass which reduces GHG emissions. The electricity supply in Brazil is largely based on hydropower which, although positive from a climate change perspective, requires alternative complementary energy generation sources due to its seasonality. Sugarcane bagasse is available for co-generation when the hydro dams are at their lowest levels during the year and is a renewable energy complement for ensuring energy security in Brazil. Ethanol produced from sugarcane is currently the most competitive renewable fuel, and is largely used in Brazil as a gasoline substitute.

iv. E&S best practices: IFC''s environmental and social action plan requires the Company''s mills to implement best-in-class practices. Key upgrades will be implemented in occupational health and safety (OHS) practices and community engagement. In the middle term, Biosev committed to be managed consistently with Bonsucro practices (although actual certification is not a requirement), which are the industry gold standards for the sugar and ethanol industry. These standards entail sustainable land management, labor practices, biodiversity, pollution prevention and community engagement.

IFC has a track record of promoting sustainability in Brazil and Biosev recognizes IFC''s role and its credibility. IFC''s expected additionality in the proposed investment includes:

i. Stamp of approval: Biosev is a listed company with shares traded in the Sao Paulo stock exchange. The Company seeks IFC''s stamp of approval as it is convinced that IFC''s presence will raise the Company''s profile compared to other sugar & ethanol players.

ii. Environmental and social standards: IFC will assist and support Biosev in the adoption of best environmental and social practices by applying IFC''s performance standards, particularly by developing an engagement plan with surrounding communities. IFC will support Biosev in setting up a communication and civil society organizations engagement strategy, actively consulting non-governmental organizations and/or public organizations.

iii. Long-term partnership: IFC''s involvement in the Project is expected to be the first step towards a long-term partnership with LDC, a multinational group that has many activities in IFC''s targeted countries and a significant impact on agribusiness value chains. IFC and LDC aim to expand their partnership in the medium term in order to co-invest in frontier markets in Africa and Southeast Asia.

This is category A project according to IFC’s Policy on Social and Environmental Sustainability. It is possible that potential significant adverse environmental or social risks and/or impacts to indigenous groups (Terena, Kaiowá and Guarani) in the area of influence of Biosev''s sugarcane plantations and its suppliers in the south of Mato Grosso do Sul State could be diverse, irreversible, or unprecedented.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.