41152 - Sinu

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Summary of Investment Information

Project Number

41152

Company Name

REFORESTADORA DEL SINU SUCURSAL COLOMBIA

Date SPI Disclosed

Nov 16, 2018

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Dec 17, 2018

Environmental Category

B - Limited

Status

Active

Last Updated Date

Jul 5, 2019

Department

Regional Industry MAS LAC & EUR

Industry

Agribusiness and Forestry

Previous Events

Approved : Dec 19, 2018
Signed : Apr 29, 2019
Invested : Jul 3, 2019

Sector

Plantation Forests

Project Description

The proposed IFC investment consists of a $15 million loan to Reforestadora de Sinu S.A. Sucursal Colombia (Sinu or the Company) to establish about 5,700 ha of eucalyptus plantations and maintain farms already planted in the Antioquia and Cordoba departments of Colombia (the Project). The Company started pilot tree plantings in 2013. In its first five years of planting, Sinu established roughly 4,800 ha plantations and conservation areas clustered in a region of sparsely populated and degraded pasturelands. Sinu aims to reach a total planted area of 10,500 ha by 2021, managing the plantations on a 7-year harvest cycle in conformity with the Forest Stewardship Council (FSC) Principles and Criteria and is committed to meeting IFC’s Performance Standards.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity

Development Impact

Environmental and/or Social (E&S): IFC anticipates the Project will generate several important positive impacts on the environment. - GHG emissions: This sustainable forest management Project will implement carbon sequestration activities that result in significant GHG emission reductions at an average of 155,000 tons CO2eq per year (negative net emissions) and zero gross GHG emissions. - Climate Resilience: As part of its operations and with IFC's support, the Project will contribute toward strengthening climate resilience in the area. This entails employing techniques such as the use of meteorological information, identification of drought and wind-resistant planting material, silviculture to improve moisture retention, and further enhancing Sinu's fire management practices. - Sustainable Land Management: The Project will make a contribution toward sustainable land management in an area characterized by extensive agriculture, land degradation from cattle ranching. Stakeholder impact: IFC anticipates that the Project will strongly contribute to the development of employment and economic activity in the area, improving resilience and stability in a post-conflict region which can be considered a frontier. Formal employment opportunities are scarce and large companies are absent in the area, apart from Sinu which represents the only formal employment option outside subsistence agriculture. The development of competitive agriculture and agribusiness sector is central to Colombia's overall efforts to diversify its economy.

Financing Structure: The proposed Project requires longer tenors than those available in the market and which are especially important for forestry. Standard Setting: The proposed investment will enable IFC to facilitate the adoption of appropriate E&S practices by the Company. Knowledge, innovation and capacity building: IFC has a role to play in sharing its extensive global knowledge in the forestry sector and helping the Company access export markets in due course. Knowledge Dissemination:IFC's global expertise from similar projects in other parts of the world provides benchmarks to help Sinu assess operating standards, and performance expectations.

E&S Category Rationale / Risks and Mitigation

This is a Category B project in accordance with IFC’s Policy on Social and Environmental Sustainability. The E&S risks and impacts associated with the proposed project can be prevented or mitigated through the combined use of a proactive environmental and social management system, application of established EHS safeguards otherwise proven in the region, and by use of internationally-recognized and externally-verified forestry practices. Environmental and social issues reviewed during appraisal included: (i) Current status of the Company’s environmental and social management systems; (ii) Proposed OHS management practices of the Company and its primary contractors; (iii) Identification and conservation of natural and critical habitats and protection of ecosystem services; (iv) Prevention, detection and suppression of fire in plantation operations; (v) Energy use, efficiency and GHG emissions associated with project development; (vi) Management of hazardous materials including agrochemicals and operational petrochemicals; and (vi) Proposed approach and tools for community engagement during plantation establishment and operations.

The Company has presented plans to address these potential environmental and social impacts to ensure that upon the implementation of the specific agreed mitigation measures, the Project is expected to comply with applicable Colombia regulations, the FSC Principles and Criteria, and IFC’s Performance Standards and General EHS Guidelines listed above as well as IFC’s EHS Guidelines for Perennial Crop Production (2016) and Forest Harvest (2006). Information on how these potential impacts are addressed is contained in the following paragraphs and in the attached Environmental and Social Action Plan.

Contacts

For Inquiries About the Project, Contact

Reforestadora de Sinu S.A. Sucursal Colombia
Luis Enei
General Manager
(57 4) 7899333
contacto@refosinu.com
Calle 59 # 10 A-32 Barrio La Castellana Montería – Córdoba Colombia
www.refosinu.com

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

http://refosinu.com/

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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