The level of concessionality (i e., “subsidy“) provided by the blended concessional finance co-investment is estimated to be 18% of the total project cost. The total cost of the project is US$61.5 million. This estimate is based on the difference between (i) a “reference swap rate” and (ii) the “concessional swap rate” being received by the IDA PSW LCF. 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 impacts: (i) Economy wide effects: The project will expand Zambeef’s production capacity and allow the company to source more inputs from local suppliers thereby supporting domestic value addition and associated job creation. The estimates of increase in GDP, value added, and jobs will be assessed using IFC’s economic impact assessment framework. (ii) Stakeholders – Consumers: Increased access to quality and nutritious foods. The project will increase production of affordable quality, safe and nutritious meat products thereby increasing access to the products across the country especially among the largely BoP consumers. Coupled with investments in the distribution system, the project is expected to increase the volume of meat products sold to consumers. Market level impact: Competitiveness: Adoption of new production technology, changes in market structure and greater value addition. IFC expects the project, through demonstration and replication channel, to contribute to increasing the competitiveness of the food processing sector through the Client’s local processing of a range of food products. The project will support vertical integration by Zambeef and acquisition of on- and off-farm modern production technologies to expand production capacity and improve efficiency in production while ensuring product quality and safety. The project will ensure full implementation/acquisition of the requisite quality certifications. Taken together, these will show case the potential for vertical integration in the sector, adoption of modern and efficient production technologies to expand production of a range of food products at affordable prices. The project will not only shape the market structure by building the food processing base and market shares for the products but also reduce production costs and achieve economies of scale. This will encourage other players to replicate the business model to increase the competitiveness of the sector.

Financial additionality -Financing structure: long-term local currency funding when Zambia has a challenge in liquidity. Zambian banks are facing single borrower limit and could not provide adequate long-term capital to Zambeef. Non-financial additionality- Knowledge, innovation, and capacity building: Zambeef will continue to tap into expertise of IFC in the development and implementation of E&S and climate smart practices, to align Zambeef’s operations with IFC performance standards and industry best practices.

This is a Category B project, according to IFC’s 2012 Environmental and Social Sustainability Policy as the E&S risks and impacts with this project are limited, site-specific, and can be readily addressed through generally accepted mitigation measures described in this document. As this is the third IFC investment with Zambeef, this client has achieved compliance with national legal and regulatory requirements and IFC’s Performance Standards (PSs). Zambeef has demonstrated corporate commitment and capacity toward meeting IFC PSs, including implementation of the 2012 and 2016 agreed upon E&S Action Plan (ESAP), through the establishment of an Environment and Technical Services department. The next phase of Zambeef’s sustainability workplan in meeting national and IFC PSs requirements is the final roll-out and implementation of Food Safety (ISO 22000), supply chain, occupational health and safety, and agronomic (farming) and animal welfare management system, including procedures and certification.

Key EHS issues for this project include the implementation effectiveness of the EHS, HR, and food safety management systems, including risk assessment and procedures in the current operations and during expansion and operational phase; supply chain management, including incidence of child and/or forced labor, OHS risks and biodiversity risk screening of third-party suppliers of corn and broilers based on traceability of farms, resource efficiency related to water and energy consumption; community health, safety and security issues, including bio-safety protocol and use of transport; and implementation of Good Agricultural Practices (GAP) for farming operations and animal welfare guidelines, including achieving certification.

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.