“IFC as implementing entity of FRFS is expected to provide a concessional subordinated loan of up to US$10 million (“blended concessional finance co-investment”). The project requires long-term financing to provide it with adequate time for construction and ramp-up. 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 any risk mitigation. Without the de-risking provided by FRFS, the project would not move forward. By supporting the project, FRFS would help a local manufacturer add value locally and create jobs. The level of concessionality (i.e., “subsidy“) provided by the blended concessional finance co-investment is estimated to be approximately 5% of the total project cost. The total cost of the project is US$27.6 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 FRFS loan. As is the case with all of IFC’s blended concessional finance co-investments, this project was assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and over 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.”

15.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity

* These investment figures are indicative

Project level impacts

Economy-wide effects: The Project is expected to generate additional value-added and an estimated 5,150 direct and indirect jobs along the Project's supply chain.

Stakeholders (consumers): The Project is expected to increase food security by providing increased access to quality, hygienically packed maize flour at affordable prices supported by a robust regional retail network.

Market level impacts: IFC anticipates the investment will contribute to strengthening the longer-term resilience of the DRC’s food market and help improve the global food supply market's ability to withstand future shocks.

Financial additionality

Financing structure: IFC will provide longer tenor term loans on terms not otherwise available for agribusinesses in the local market (8 years and three years grace) and blended finance from IDA-PSW. The sector is experiencing financial challenges due to limited commodity-based financing by commercial banks. The proposed IDA-PSW support will adjust the risk-return profile of the transaction while facilitating a strong impact on the economy and consumers.

Non-financial additionality

Knowledge, innovation, and capacity building: IFC, through advisory services, is expected to improve the knowledge, innovations, and capacity of the client to implement industry best E&S and HSE practices at the manufacturing facilities and to the manufacturing facilities acquire requisite food safety certifications leading to improved product quality and safety.

This is a Category B project based on IFC’s 2012 Policy on Environmental and Social Sustainability. IFC’s review concluded that the E&S risks and impacts associated with this project are limited, site-specific, and can be readily avoided or mitigated through generally accepted mitigation measures described in this document and in the E&S Action Plan (ESAP).

The key E&S risks and issues for this investment are: (i) adequacy of the E&S Management System (ESMS), comprehensiveness of the E&S management programs and procedures aligned with Good International Industry Practices (GIIPs), internal E&S capacity/competency to assess, and manage E&S risks and impacts associated with the farming and milling operations; (ii) HR and OHS Management Systems for assurance of fair and safe labor and working conditions for permanent and seasonal workers; (iii) increase of the water usage associated with the establishment of the pivot irrigation infrastructure, and water resource sustainability; (iv) implementation of good agricultural practices (GAPs) at farms, including soil, water, solid/hazardous waste management, promotion of Integrated Pest Management (IPM) and biodiversity conservation, including credible certification; (v) adequacy of the stakeholder engagement with neighboring communities and effectiveness of the 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.