The main sponsors of the project are Mr. Mhamud Charania and his mother Mrs Gulsham Ramji. Mr. Mhamud Charania is a 37-year-old British citizen and holds a mechanical engineering degree from the University of Toronto. He is dynamic, enthusiastic and is well respected by his staff. He is an influential member of the Ismaili community in Maputo. Mrs Ramji is 69 years old and is essentially retired. The sponsors came to Mozambique in 1994. They established Africom Lda which has been successfully trading in and distributing basic commodities such as sugar, rice, oil, soap, biscuits, and maize and wheat flour, sourced locally and abroad. They founded Merec Industries Lda in 1998. Part of the Merec complex is rented to Africom.

The total project cost is estimated at $4,950,000. The proposed IFC investment is a Guarantee Facility of $ 2.5 million to guarantee the loan that will be provided to Merec by Banco Standard Totta de Mozambique (BSTM).

2.39 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	2.39
Loan
Equity

* These investment figures are indicative

The Merec II project will be located in Beira. The location in Beira, the biggest market in Mozambique, is one of the major strengths of this project in addition to the close proximity to the port. The Beira region is one of the most populated parts of the country with an abundant labor force. The site consists of two hectares of unoccupied land within the Beira industrial area. Power, water and other utilities are nearby and available.

This is a category B project according to IFC''s environmental review procedure. Key environmental, social and occupational health and safety issues associated with this project include compliance with relevant national and World Bank Group environmental and health and safety requirements; air and dust emissions; wastewater treatment and disposal; solid waste management; compliance with Mozambican labor law and IFC policy on harmful child labor; employee exposure to noise and dust and provision of personal protective equipment; health and safety training for employees, including information about HIV/AIDS; packhouse and storage facility hygiene; prevention of and response to fires and flash explosions; and employee safety and good housekeeping measures.
Location of environmental documents in locally affected community
Details of the proposed operating procedures and mitigation measures will be provided in the Environmental Review Summary (ERS) and this Summary of Project Information (SPI) which will be available to the public at the following locations: - World Bank offices in Maputo/Beira; - Merec’s offices in Maputo; - Regional office of Banco Standard de Mozambique in Beira; - World Bank Group Infoshop; - World Bank Group Infoshop website at www.worldbank.org/html/pic/PIC/html.

The project development impact can be summarized in the following categories: - Enterprise Development: Merec is interested in participating in supply chain and distributor chain linkages, which with the assistance of IFC can help the growth of small and micro enterprises (MSME’s). This will involve the provision of technical assistance for the local micro and small bakeries, which will use their products. . Merec’s new project will create opportunities for many small businesses to supply goods and services to the plant. A growth in the supply chain will also come about as Merec will be distributing its increased volume through a network of small scale distributors and in some cases directly to new small bakeries. Merec has also requested the support of IFC in the development of the company’s HIV/Aids awareness and treatment programs. - Economic Growth: The World Bank Group’s objectives in Mozambique include supporting the Government’s program for poverty reduction by investing in sustainable industrial projects. The Merec expansion project will add economic value and create 48 new, direct jobs. Merec will provide the necessary on-the-job training for supervision and technical staff in order to improve skills and strengthen the industrial base. Merec will source its packaging locally and will also promote local transport companies which will be subcontracted to carry grain and finished product. - Provision of Finance: IFC is providing financial backing through the guarantee facility thereby enhancing the ability of a local bank in Mozambique to make a long-term loan available to the project. There is a shortage of long term project finance available in Mozambique because of the need for bank liquidity and perceptions of risk.