The proposed IFC loan will be funded by a cross-currency swap with IDA through the IDA PSW LCF (“blended concessional finance co-investment”). The project requires long-term financing in local currency to provide AKF with adequate time for development and ramp up and to align the Company’s cash flows with their debt obligations, both in terms of timing and currency. However, the high country and project specific risks lead to a mismatch of risk and return, limiting the project’s ability to secure the required long-term financing. Without the support provided by IDA PSW LCF, the project would not move forward. By supporting the project, IDA PSW LCF would help a local agribusiness company to add value locally, increase access to quality animal feed and create jobs. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be 24% of the total project cost. The total cost of the project is $12.3 million. This estimate is based on the difference between (i) a “reference swap rate” and (ii) the “concessional swap rate” received by the IDA PSW LCF. As is the case with all IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for Development Finance Institution (“DFI”) Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles, IFC’s blended finance approach and governance, and historical information on estimated subsidy levels in IFC’s blended finance portfolio can also be found at: www.ifc.org/blendedfinance.

10.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity

* These investment figures are indicative

Economy-wide effects: The project boosts Ethiopia's economy though increased local value addition and job creation, promoting local feed production. By strengthening linkages with suppliers, it supports economic diversification and addresses unemployment challenges. Stakeholder effects: Livestock farmers benefit from better-quality compound feeds and technical support. The project helps address crop and livestock productivity gaps but faces supply risks due to conflict in key regions. Market creation effect: The investment introduces innovations in feed formulation, marketing, and bulk storage to strengthen Ethiopia's livestock feed market. By using food processing byproducts, Alema Koudijs lowers costs and improves margins, while expanded storage ensures supply stability. Aligned with national and World Bank initiatives, the project fosters systemic changes, though competitor capacity limitations may constrain broader scalability.

Financial Additionality - Financing structure: IFC will provide the Company with a US$10 million equivalent local currency denominated long term financing otherwise not available in Ethiopia for agribusiness projects like the one proposed. Non-financial Additionality - Knowledge, Innovation, and Capacity Building: IFC's involvement in the Project will benefit the Company through IFC's global industry knowledge, and connection with IFC's global network of players in the animal feed/livestock value chain and associated industries. The support will help address the current corporate governance and Health, Safety, and Environment (HSE) compliance gaps in the sector and align AKF's operations with IFC Performance Standards and industry best practices. The Project will be complemented by an Advisory Services program to support the Company's biodiversity and child labor risk mitigation measures.

Indicator	Metrics	Comments
Direct Employment (#) Operations And Maintenance	individuals

This is a Category B project according to IFC’s 2012 Policy on Environmental and Social Sustainability due to limited and site-specific E&S risks and impacts associated with the expansion of the existing feed mill and the construction of new silos. These can be avoided or mitigated by adhering to recognized Good International Industry Practices (GIIPs). Key E&S risks and issues for this investment are: (i) identification and management of E&S risks and impacts during the expansion of the feed mill and the construction of the new storage facilities; (ii) fair treatment and safe working conditions for employees and contractors, including implementation of HR policies and procedures aligned with PS2 requirements; (iii) emergency preparedness and response; (iv) resource efficiency and GHG emissions; management of dust and noise; (v) community safety, traffic and use of security forces, including implementation of a feed safety management system; (vi) habitat conversion risk in primary production sourcing regions raw materials; and (vii) management of PS 5 risks related to government led acquisition of at the proposed site for the construction of storage capacity.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.