30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

The most significant, expected project-level outcomes are the benefits to farmers and the positive environmental effects of the planned Best Available Techniques (BAT) investments. Beyond the project, IFC anticipates that the investment has the potential to promote market integration through improved competition and market enabling investments. The project will have the following impact: (i) Environmental and/or social benefits - IFC anticipates that, alongside improved operational efficiencies and lower costs of production, the project will have a significant positive effect on the environment. The BAT investment program financed by the project entails reductions in both water and energy use at Astarta's sugar plants. The project will also finance more modern and efficient machinery and equipment for the agriculture operations, enabling the Company to cultivate the land in a more sustainable manner. (ii) Benefits for the Consumers - IFC anticipates that, given the Company's focus on staple crops and its export orientation, the project will have a strong contribution on food security. IFC expects the increase in production of grains and oilseeds to translate into food availability for about 500,000 additional people. (iii) Benefits for the Farmers - IFC anticipates that the project will reach additional farmers through purchases of larger volumes of grains and oilseeds from third parties, investments in new storage capacities for third-party use, and new employment in agricultural operations at Astarta's own farms. IFC expects the construction of new storage facilities to address a significant infrastructure bottleneck for Ukraine's primary producers, enabling sales at more opportune times, expanding choices of who to sell to, and reducing port-harvest losses by up to 3,500 MT per year. IFC expects that these in turn will generate better incomes and more streamlined trading relationships.

IFC's additionality in the proposed transaction stems primarily from its contribution to shaping the Company's sustainability practices and mitigating the country risks through consistent high-level support to a long-standing client in a country that is susceptible to periods of economic and political instability. In particular: (i) Standard Setting with support to improvements of Environmental & Social standards: Since IFC's first investment in 2012, the Company has steadily improved its E&S performance as evidenced by (a) the Company's compliance with IFC's several the Environmental and Social Action plans; (b) the Implementation of energy efficiency measures at the sugar plants with the BAT program 2012-2016, and now, the BAT program 2017-2022; and; (c) the award of several E&S certifications to the Company including ISO9001/14001/500001, OHSAS 18001, and, FSSC 22000. As a result of this project, two four new plants (Kobeljatsky, Yareskivsky ZhdanivskyNovoorzhytskiy, and, Novoivanivskiy) will be certified ISO 14001OHSAS 18001 (E&S Management) and ISO22000 (food safety) while Globino, now equipped with its waste water treatment plant, will be certified ISO50001 (energy management). (ii) Non-Financial risk mitigation by minimizing the risk of political intervention and the impact of the political crisis. Indeed, IFC stayed during the political and economic crisis which affected Ukraine and continued to support the Company with two liquidity loans (in 2015 and 2016) commercial funding was not available.

The project is categorized as a category B project according to IFC’s Policy on Environmental and Social Sustainability as the IFC’s review of project activities indicates that the associated E&S risks and impacts are few in number, generally site-specific and readily addressable through mitigation measures.

Key environmental and social (E&S) issues associated with this project include: efficient implementation and maintenance of environmental health and safety (EHS) management systems; assurance of safe and healthy labor and working conditions in compliance with local regulatory requirements and Performance Standards; implementation of good and safe agricultural practices ; further implementation of modernization and the use of best available technology (BAT) to reduce water, electricity and natural gas consumption; and improvement of wastewater management and minimization of hazardous materials use.

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.