47401 - GWFP Valency

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Summary of Investment Information

Project Number

47401

Company Name

VALENCY INTERNATIONAL TRADING PTE LTD

Date SPI Disclosed

Feb 8, 2024

Country

Africa Region

Region

Africa

Projected Board Date

Mar 25, 2024

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Nov 19, 2025

Department

Regional Industry - MAS Africa

Industry

Agribusiness and Forestry

Previous Events

Approved : Sep 21, 2010
Signed : Oct 7, 2024

Sector

Grains and Beans

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is an up to US$25 million risk participation by IFC in an up to US$50 million 3-year uncommitted annual revolving, commodity backed, secured, trade finance facility (“Facility”) extended by ABSA Bank Limited (“Absa” or the “Bank”) to Valency International Pte Ltd (the “Company” or “VIPL”) to support its subsidiaries in financing pre-export storage of raw cashew nuts (RCN), cocoa, sesame, shea nuts, ginger and soya beans sourced directly or indirectly from smallholder farmers in Nigeria, Ghana, Tanzania and Cote d'Ivoire. The Project is expected to be supported by the IDA Private Sector Window’s Blended Finance Facility (IDA PSW-BFF) to de-risk the investment.

Associated Advisory Engagement

There are no Advisory services engagement associated with this Project.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	50.0
Loan	150.0
Equity

Development Impact

(i)The Project is expected to enable continued access to finance for smallholder farmers and small and medium-size commodity traders through the Group’s procurement activities in Tanzania, Cote d’Ivoire, Nigeria, and Ghana. (ii) IFC expects the Facility to contribute to the strengthening of financial integration of the commodity value chains in the target countries by maintaining continuity and connections between cross-border private sector financial institution, local farmers, cooperatives and exporter.

(i) Financial additionality driven by IFC’s countercyclical role in providing short-term liquidity to the agribusiness value chains, at a time of restricted availability in terms of country and obligor limits across Africa (ii) Non-financial additionality from IFC's contribution to improving the Company’s environmental and social practices, in line with IFC’s Performance Standards and industry best practices

E&S Category Rationale / Risks and Mitigation

The proposed investment is a risk participation by IFC in a trade finance facility extended by ABSA Bank (“ABSA” or the “Bank”) to an agri commodity trading company (the “Company”). The target commodities are cashew, sesame, shea nuts, ginger and soya beans held under Collateral Management Agreements (“CMA”) in preapproved warehouses in Nigeria, Côte d’Ivoire, Ghana and Tanzania after purchasing from farmers. The key E&S risks and impacts derive from the Bank’s capacity to identify and manage the potential E&S risks associated with soft commodity supply chains. Typical risks and impacts include occupational health & safety and supply chain-related risks as described in Performance Standard 2 and 6. As such, the Project has been categorized as Category FI-2 in accordance with IFC's Sustainability Policy. Absa is an existing client with satisfactory Environmental & Social (“E&S”) performance. An assessment of labor practices in relation to Performance Standard 2 and life and fire safety requirements revealed that the Bank meets the respective IFC requirements. The Project will not support coal-related activities or higher-risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant Occupational Health and Safety risks. The applicable E&S performance requirements for this Project include the IFC Exclusion List, relevant host country E&S laws and regulations, and the IFC Performance Standards as they pertain to soft commodity supply chains. Absa will also be required to meet labor and working conditions in line with IFC Performance Standard 2 and IFC's Life and Fire Safety Standards for financial intermediaries.

Absa has an E&S team and an environmental and social management system, which describes the procedures to be followed for evaluating E&S risks and impacts of its lending activities. These include E&S screening against the IFC Exclusion List and reputational risk, categorization, E&S assessment against applicable standards, including national laws and IFC Performance Standards, contracting, and monitoring. Absa’s environmental and social management system has limited application for short term trade finance in agro-commodities. The Bank sets out triggers and criteria for E&S due diligence based on tenor and amount. Consequently, some transactions trigger enhanced due diligence by the E&S credit risk team while most transactions, including short-term trade finance, have a streamlined E&S due diligence performed by the commercial teams. For this project, Absa will design a dedicated process to address the risks associated with this transaction. This includes, agreeing jointly with IFC and the Company requirements to agree on a roadmap to address E&S risks in the Company’s supply chain, prior to the commitment of the facility. Therefore, ABSA will require the Company to (i) provide representations and warranties that the Company does not purchase soft commodities from suppliers contributing to significant conversion of natural and/or critical habitats or that are produced using child or forced labor and (ii) develop a supply chain management system consistent with PS2 and PS6 requirements and supply chain MAP updated periodically. Additionally, ABSA will be required to establish a formal monitoring of the Company allowing for verification of implementation of the supply chain management system.

Title	Anticipated Completion Date
Monitoring procedure	05/31/2024
Agreement between Absa and the Company regarding supply chain assessment and management.	03/31/2024

Contacts

For Inquiries About the Project, Contact

Valency International Pte Limited
Deepak Tikoo
Group Treasury Manager
+91 7506001720
treasury.du@valencyinternational.com
10 Anson Road, #18-26 International Plaza
www.valencyinternational.com

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII 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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