The Project is expected to be supported by the International Development Association’s Private Sector Local Currency Facility (IDA PSW-LCF), by hedging up to US$15mn of IFC’s local currency loan for the Project. IDA-PSW LCF support will ensure the Group has access to long-term funding in local currency at a viable rate that ensures the Project’s financial sustainability by aligning the currency of the loan to the Company’s revenue model. The main development impact of the Project is related to employment generation and increased access to crop production products at affordable prices in the Project countries. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be 12.1% of the total Project cost. The total cost of the project is US$35 million. This estimate is based on the difference between (i) a “reference price” (either a market price if available; the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the “concessional price” being charged by the blended concessional finance co-investment. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance.”

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

* These investment figures are indicative

Project level Impact: (i) Economywide effects: The Project will expand the Group’s production capacities and allow the Group to source more inputs from local suppliers, which will support domestic value addition and associated job creation. Using IFC’s economic impact assessment framework, we estimate that the project will lead to an average increase in annual GDP of US$217 million across the target countries, of which about US$26 direct value added, and US$192 indirect value added, as well as the generation of 1,600 direct jobs and 7,150 new indirect jobs. (i) Stakeholders - Increased outreach of distributors and retailers to smallholder farmers: The Project will improve the Group’s outreach to smallholder farmers through an expansion in its distribution networks in Nigeria and beyond. Specifically, scaling up blending and packaging operations will allow the the Group to increase the number of distributors and retailers reached by 7,200, in all turnover categories, from key accounts to medium and large agri-dealers to small-size retailers, not excluding the farmers that may be reached through market days or other training and extension services. The distributors will be strategically located, offering coverage across the individual countries, and increasing proximity to the customers, while also generating market intelligence for the Group. Further, the Group will be investing in ERP and warehouse inventory management systems, in the hope to enhance real time inventory management and, going forward, to experiment with digital and direct delivery models. Market level impact: (i) Competitiveness - Triggering new product offerings and supporting greater domestic value addition: IFC expects the Project, through the demonstration and replication channel, to contribute to increasing competitiveness of the crop protection sector in sub-Saharan Africa, through a first-mover company that will start local manufacturing of a select range of reliable herbicides in Ghana, Uganda, and Tanzania, and encouraging other companies to follow its lead and bring the production of quality crop protection closer to its final beneficiaries. The proposed investment will showcase the potential of domestic vertical integration in the crop protection industry in sub-Saharan Africa, and in particular spearhead a replicable business model for the crop protection sector in Anglophone West and East Africa. Market effects will play out through the example of a distributor company that evolves into a local manufacturer, thereby increasing its margins – as has been proved to be the case with the Group’s Nigerian operation – and steadily broadening up its market share. The Group’s strategy aims to shape the market, not only building on a regularly growing manufacturing base, in order to reduce costs and possibly attain economies of scale, but also enhancing its capacity development of retailers, both directly and indirectly through training of trainers and multimedia and digital content platforms.

Financial additionality: Innovative financing structure - IFC would provide the Group with a patient USD-denominated funding with a 8 years tenor including 2 years grace period to enable the Group to accomplish its vertical integration plan in the regions. This type of financing is not readily available locally for agribusiness companies. Non-Financial additionality: Knowledge, Innovation and Capacity Building - IFC will provide in-depth expertise in safer and effective crop protection products through its Industry Specialists. In addition, IFC Advisory Services, Environmental and Social Impact teams will explore environmentally safe certification requirements to ensure compliance with biopesticides market and organic agriculture industry standards. At appraisal IFC Advisory Services will brainstorm with the Company about the engagement scope (e.g. deploying the agribusiness leadership program (ALP); organize the Last Mile Retailer (LMR) training of their distributors and providing agronomic support including good agricultural practices (GAP). Standard setting: IFC could support a family owned Company improve its Corporate Governance practices.

This is a Category B project according to IFC’s 2012 Policy on Environmental and Social Sustainability as the project is expected to have limited adverse environmental and social risks and impacts that are few in number, short-term and site-specific, and can be avoided or mitigated by adhering to recognized Good International Industry Practices (GIIPs) procedures, guidelines, design criteria and pollution prevention/control equipment’ Best Available Technology (BAT) as described in the following sections and the attached E&S Action Plan (ESAP). This categorization is aligned with similar type of projects within the sector.

The key E&S risks associated with this project include: (a) IFC PSs compliant E&S Impact Assessment (ESIA) for proposed expansion in Nigeria and greenfield manufacturing facilities, including implementation of E&S management plans (ESMPs) as per Terms and Conditions of the Environmental License; (b) company’s ESMS aligned with IFC PSs requirements and World Bank Group (WBG) Environmental, Health and Safety (EHS) Guidelines (General and for Pesticide Manufacturing, Formulation and Packaging) and implementation effectiveness; (c) company’s E&S staffing, capacity and competency to implement the corporate ESMS and plant-level ESMP, including assignment of annual EHS OPEX/CAPEX; (d) assurance of fair, safe and healthy working conditions for employees and contract workers, especially occupational, health and safety (OHS) procedures; (d) effluents, atmospheric / point source air emissions, waste and hazardous materials management as per national standards and WBG EHS Guidelines; (e) integrated pesticide management; (f) life and fire safety and emergency response; (g) road traffic and security management; and (h) stakeholder engagement and community grievance mechanism.

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.