47376 - Habiganj Agro Limited

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Summary of Investment Information

Project Number

47376

Company Name

PRAN GROUP- FOUR COMPANIES

Date SPI Disclosed

Feb 20, 2024

Country

Bangladesh

Region

South Asia

Projected Board Date

Mar 25, 2024

Environmental Category

B - Limited

Status

Active

Last Updated Date

Jul 14, 2024

Department

Regional Industry - MAS Asia & Pac

Industry

Agribusiness and Forestry

Previous Events

Approved : Mar 22, 2024
Signed : Mar 27, 2024
Invested : Jul 8, 2024

Sector

Other Food

Project Description

The group of companies known as PRAN Group (PRAN or the Group) was established in 1981. The Group is a leading branded food and beverage group and the largest agro-processer in Bangladesh. PRAN is a well-known household brand in Bangladesh and produces more than four hundred food products across multiple categories including juices and drinks, snacks, dairy, spices, grains, and frozen foods. PRAN exports to 145 countries around the world.

IFC will provide long-term US Dollar working capital financing to be utilized across the two group companies, Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL).

Associated Advisory Engagement

1.IFC will help build capacity of second-tier suppliers and franchisees of Pran on food safety, including working with smallholders to improve adoption of Good Agriculture Practices in 3-4 commodities (cassava, dairy, rice etc.) 2. In addition, IFC will work with Pran on decarbonization initiatives – focusing on alternative fuel for electricity generation, improving efficiency of delivery of utilities, reducing demand for water, energy in processing and packaging, reducing volume of effluent and improving efficiency of Effluent Treatment Plant and potentially, converting waste to resource.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

Development Impact

1.Project Outcome- Economic-wide Impacts- The project will increase value addition and job creation from the HAL and PDL operations under the Pran Group, enable the companies to increase exports through the provision of long-term US Dollar working capital. The two Companies' direct employment is expected to grow from 15,501 in 2023 to 22,501 in 2027. 2.Market Creation- ?Resilience- The project investment will provide a working capital loan to sustain operations for a client that is the market leader in Bangladesh in several food categories that it operates in and in a tough economic environment where the country is facing a shortage of US dollars. IFC expects this project may serve to have a demonstration effect, leading to the provision of more USD working capital loans by other international lenders to support similar companies to sustain their operations in the current environment

1. Financial Additionality-?-Financing Structure: IFC will provide PDL and HAL, sister concerns of Pran Group, with a USD working capital loan, filling a crucial gap at a time when local banks are struggling to secure USD for their clients. IFC is proposing a US Dollar loan of up to US$30 million with a tenor of 6 years, including a 2-year grace period, to support the companies' working capital requirements for raw material imports and ensure the long-term stability of their operations. ?2. Non-Financial Additionality-Knowledge, Innovation and capacity building: (i)IFC will provide advisory services to develop Pran’s smallholder sourcing supply-chain in Bangladesh for key commodities (casava, dairy, rice) working with 10,000 smallholders as well as developing decarbonization opportunities in Pran’s agro-processing operations through resource efficiency and circular economy assessments. (ii) IFC will continue to help improve E&S food safety and good agricultural practice standards of the Pran Group and its farmer suppliers and support in improving efficiency and reducing food loss and waste, a key aspect of IFC's additionality for Pran. (iii) IFC will support PRAN to improve gender diversity and inclusion in their workplace by providing recommendations, guidance, and tools to improve policies and practices to support workplace participation of all genders, particularly women through its Partnership for Women’s Employment, a peer learning initiative for select private sector companies in Bangladesh.

E&S Category Rationale / Risks and Mitigation

This is a Category B project as per IFC’s Policy on Environmental and Social Sustainability (2012). The key E&S issues include: (i) implementation effectiveness of PRAN’s and HAL/PDL E&S management system, including risk identification & assessment of construction contractor oversight for maintenance works; (ii) assurance of fair, safe and healthy working conditions, including key risks such as OHS, Gender-based Violence and Harassment (GBVH), and 3rd party workers; (iii) resource (energy/water) efficiency, GHG emissions, pollution prevention and control, storage of hazardous materials and management of solid/ hazardous wastes; (iv) community health and safety risks, including hazardous materials transport, life & fire safety risks, offsite emergency preparedness and response, and food safety management systems; v) sourcing of local (e.g. potato, cassava) and imported raw materials (e.g. (flour, sugar, milk powder, vegetable fat, resin, packaging material, etc.) and risks of child/forced labor, significant OHS risks, and risks of significant natural habitats conversion for the production of these raw materials.

Contacts

For Inquiries About the Project, Contact

Habiganj Agro Limited
Md. Saiful Islam Sajib
Assistant Manager, Corporate Finance
+88 01769-696-168 Ext:427
bd40@prangroup.com
PRAN RFL Center I 105 Middle Badda Dhaka-1212, Bangladesh.
https://www.pranfoods.net/

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Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

Habiganj Agro Limited

Md. Saiful Islam Sajib, Assistant Manager, Corporate Finance

Pran RFL Center, I 105, Middle Badda, Dhaka – 1212, Bangladesh

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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