The Project is sponsored by Mr. Danilhoussen Ismael and his son Mr. Shahim Ismael (together the Sponsors). Mr. Ismael is a successful businessman in Madagascar who started as a trader and importer / distributor of spare parts/ paints. He moved thereafter to the manufacturing of plastics when he created Société Malgache de Transformation de Plastiques (SMTP). Together with his son Shahim Ismael, he now owns the SMTP Group, a leading conglomerate of about 20 companies involved in industrial plastics, bakery, poultry, animal feed, real estate, automobile dealership.

The total project cost is estimated at US$15.3 million. The proposed IFC investment is a C loan for IFC’s own account of US$3.5 million and a C loan of US$3.5 million for GAFSP’s account.

Project is located in Fort-Dauphin, in a remote part of Southern Madagascar, one of the poorest regions of the country

The Project has an Anticipated Impact Measurement and Monitoring (AIMM) rating of Excellent. The most significant, expected project-level outcome is improved access to market for herders and smallholder farmers, increased employment, and more economic activity in one of the poorest regions of Madagascar. Beyond the project, IFC anticipates that this investment has the potential to promote greater integration and market competitiveness via the creation of a new market for meat exports and animal feed, linked to global value chains.

IFC is supporting the client on the governance side through the appointment of the management team. A corporate governance assessment of the SMTP Group is also expected as a follow-up to the project with the objective to develop a corporate governance action plan.

IFC additionality will stem from financial and non-financial sources. On the former, IFC's long-term, quasi equity funding is not available in the market and will enable the Companies to proceed with the investment. On the latter, IFC Advisory Services (AS) has worked with the Companies to make this investment viable. Through IFC AS, IFC will add value to the Companies by setting standards for the meat industry and providing knowledge and innovation in the form of technical and industry expertise, support for business strategy and operations, and supplier development.

This is a Category B project according to IFC's Policy on Environmental and Social Sustainability. The proposed investment is expected to have limited environmental and social impacts, which are site-specific, temporary and none is expected to be significant. Projected impacts can be avoided or mitigated by adhering to applicable performance standards, procedures, guidelines and design criteria as described in the following sections.
The project is designed to avoid, minimize and manage environmental and social risks and impacts of operations to comply with national laws and regulatory requirements, and applicable IFC Performance
Standards. The main environmental, social, occupational health and safety risks applicable to this investment are: (i) obtaining relevant environmental licenses for the Companies' facilities; (ii) appropriate environmental, including bio-security and disease prevention, occupational health & safety (OHS), and social management system development and its effective implementation; (iii) terms of employment and working/living conditions for farm workers, including at contracted farms; (iv) animal husbandry provisions and emergency preparedness and response procedures, including those related to livestock diseases; (v) prudent and efficient use of public utilities (water supply and energy); (vi) management of wastewater and solid wastes; (vii) treatment, supply and monitoring of potable water;(viii) hazardous material handling, and management of pest infestations; (ix) occupational health & safety of all workers; and, (x) engagement with communities and exposure to potential E&S risks.

Key E&S issues applicable to this investment are: (i) obtaining operational licenses for Bovima and Agrifeed facilities; (ii) appropriate environmental, including bio-security and disease prevention, OHS, and social management system development and its effective implementation; (iii) adherence to Malagasy labor law, terms of employment and working/living conditions for farm workers accommodations, including at contracted farms; (iv) Life and Fire Safety (L&FS) provisions and emergency preparedness and response procedures, including those related to livestock diseases; (v) prudent and efficient use of public utilities (water supply and energy), optimization of water and energy use through design and resource conservation measures, including greenhouse gas emissions; (vi) management of wastewater and solid wastes, air emissions from generators, boilers and heating (coal) systems, provision of potable water, and its treatment and monitoring, appropriate hazardous material handling, management and control of pests and rodents; and, (vii) engagement with communities commensurate to their exposure to potential E&S risks.
Please refer to the Environmental and Social Review Summary (ESRS) linked to this project SII in the IFC's project disclosure website.

Refer to the E &S Action Plan tab in the ESRS on the SPI (publishing) site.