The Company is currently owned by Mexichem SAB de CV (“Mexichem”), a publicly traded company headquartered in Mexico. Mexichem owns an 80% stake while the remaining 20% stake is held by a kibbutz (communal settlement in Israel) entity called Hatzerim. Hazterim is one of the initial founders of the Company and Netafim’s main plant is still located at the kibbutz.

 The proposed investment is a loan of up to $90 million to Netafim. The financing package would be comprised of an A Loan of up to $40 million, a B1 Loan mobilized under IFC’s standard B Loan program of up to $30 million, and a Trust Loan of up to $20 million provided under the Managed Co-Lending Portfolio Program (“MCPP”).

Disbursements will be directed to the holding company in Israel to fund working capital needs in Africa and to Netafim´s subsidiaries in China and Turkey.

Development impacts will mainly depend on Netafim’s ability to continue expanding its presence and its sales in Africa, Turkey and China. IFC does not foresee any governance risks. The usage of MIS by farmers will contribute to (i) improve yields, (ii) generate higher incomes, (iii) reduce water and fertilizer usage, (iv) reduce energy consumption by decreasing the amount of water pumped and (v) strengthen farmers resilience to climate change.

    This is a category B project according to IFC’s Environmental and Social Sustainability Policy because the project is expected to generate limited and site-specific E&S impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Material E&S risks and impacts include the following: those associated with the manufacturing of the micro-irrigation components, notably the use of energy and water, the efficient use of raw material inputs, the management of wastes and their recycling or proper disposal, and the appropriate management of the company’s human resources and compliance with the labor laws of the countries in which the manufacturing operations are located.