40942 - Senegal Societe de Transformation des Legumes

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Summary of Investment Information

Project Number

40942

Company Name

SOCIETE AFRICAINE D'INGREDIENTS

Date SPI Disclosed

Oct 21, 2019

Country

Senegal

Region

Africa

Projected Board Date

Mar 15, 2020

Environmental Category

B - Limited

Status

Active

Last Updated Date

Aug 12, 2023

Department

Regional Industry - MAS Africa

Industry

Agribusiness and Forestry

Previous Events

Approved : May 29, 2020
Signed : Jun 27, 2020
Invested : Aug 9, 2023

Sector

Fruits and Vegetables

Additional Project Attributes

Blended Finance

Project Description

The proposed investment consists of a €3.5 million A-loan from IFC for its own account. In addition, IFC as implementing entity of the Private Sector Window of the International Development Association (IDA PSW) is expected to provide a €3.5 million IDA PSW-loan (“blended concessional finance co-investment”) to support Société Africaine d’Ingrédients S.A. (SAF Ingredients or the Company), a French-Senegalese joint venture, in the development of a €18 million greenfield onion dehydration plant and 760-hectare nucleus farm near St Louis in Senegal. The A loan and the IDA PSW loan would be for capital expenditures and permanent working capital. The project entails decommissioning an existing onion dehydration plant (newly built in 2003 and closed in 2014) near Dijon, in France, and SAF Ingredients purchasing it for relocation to St. Louis. As the sponsor of the project, Dijon Céréales (a French agricultural cooperative) will manage the transfer of the plant with the technical support of Biaugeaud (a French engineering company), setting up the nucleus farm, and operating the plant in Senegal (the “Project”). This would be the first industrial-scale dehydration plant of its kind (no direct exposure of onions to the heat source) located in West and Central Africa.

Associated Advisory Engagement

The Project would source approximately 30% of its raw material supply from small holder farmers. It is planned that IFC would provide training to small holder farmers in good agricultural practices, soil fertility and technical assistance for irrigation.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management	0.13
Guarantee
Loan	10.90
Equity

Development Impact

Stakeholders - suppliers (commercial farmers & smallholder farmers). IFC expects the Project will increase market access for onion farmers and help raise their productivity. Economy-wide impacts - IFC expects the project will create 70 permanent and 20 temporary jobs at the factory and 50 direct and 200 seasonal jobs at the nucleus farm. In addition, the Project will build specialized skills regarding quality, food safety and maintenance in large, commercial and professionally-run, food processing operations, and raise standards by formalizing and structuring the onion supply chain with offtake contracts, price guarantees, and quality requirements.

Financial structure: the proposed IFC financing is for a long term loan. Resource mobilization: IFC is working closely with another development finance institution to provide financing to SAF Ingredients. Standard-setting: IFC would assist to put in place a corporate governance structure in line with global best practices. In addition, the dehydration plant would meet FSSC 22000, which would serve as a benchmark for the food processing sector in Senegal.

E&S Category Rationale / Risks and Mitigation

This proposed investment is expected to have limited environmental and social impacts, which are expected to be site-specific and none is expected to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy. The project is designed to avoid, minimize and manage E&S risks and impacts of the company’s operations in compliance with Senegalese legal and regulatory requirements, IFC’s Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Annual Crop Production, and Food and Beverage Processing) Environmental, Health and Safety (EHS) Guidelines.

Key E&S risks associated with this investment are: (i) the occupational health and safety risks associated with the construction of the greenfield dehydration plant; (ii) once operational, capacity and ability of SAF to manage and monitor the EHS risks associated with producing dry onion products; (iii) occupational health and safety including life and fire safety during operations; (iv) working conditions and terms of employment; (v) surface water withdrawal and consumption; (vi) management of hazardous materials such as chlorine, on-site fuel storage, and pesticides; (vii) wastewater management; (viii) road traffic safety associated with transport of raw material and finished product; and (ix) sustainable supply chain assurance (related to the 600 smallholder farmers) including raw material quality.

Contacts

For Inquiries About the Project, Contact

SAF Ingredients
Mr. Emmanuel Biaugeaud
Directeur General
+ 33 (0) 557 102 810
evd@biaugeaud.com
Km3, Route de Diana, St Louis, Senegal

For Inquiries and Comments About IFC, Contact

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IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

St-Louis, Senegal

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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