The project sponsor is Inversiones Manuelita S.A. (Manuelita), the second largest sugar producer in Colombia with over 140 years of experience in sugar production. Manuelita acquired a majority interest in Laredo in 1998 and devoted significant financial, technical and managerial resources to turn the company into a highly productive and profitable enterprise. Manuelita has a 79% interest in the company, the balance being owned by individual investors and employees.

The total project cost is estimated at $43 million over the period FY2005-2008. The proposed IFC financing package comprises a corporate loan of up to $18 million.

18.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	18.0
Equity

* These investment figures are indicative

The company owns several sugar cane fields and a sugar mill located near the city of Trujillo, approximately 560 km north of Lima, Perú.

The project will strengthen the international competitiveness of a successful private company and reduce the country’s reliance on imports by lowering sugar production costs. The company will introduce innovative irrigation methods to convert unused desert land into agricultural land, which, if successful, could be utilized by other local companies to turn arid land into productive use. The project will also result in additional job opportunities (about 340) in an area where the company remains the principal source of employment. The project will benefit its financiers, the company’s employees, through the employee profit sharing program, and the government through taxes.

- Long-term support to allow a well-run company to accelerate its expansion plans.
- Support the improvement in competitiveness of an efficient company which could lead in the future into lower prices for domestic consumers.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

The review analyzed the following potential environmental, health and safety, and social impacts:

- Management systems for environmental, health & safety and social affairs;
- Land acquisition process and land use permits;
- Environmental planning and permits;
- Sustainability and quality of potable water supply;
- Management of emissions to the environment (liquid effluent, solid waste and air emissions);
- Hazardous material management;
- Biological and chemical control of pests;
- Working conditions for direct and contracted employees, including sugar cane workers;
- Occupational health and safety in plantations and facilities;
- Community development.

The identified environmental, social and health and safety impacts which require ameliorative activities are summarized in a Corrective Action Plan (CAP) that Laredo will implement as part of IFC’s Loan Agreement. Upon successful implementation of the agreed mitigation measures, the proposed project will meet Peruvian laws and regulations as well as the applicable World Bank/IFC environmental, social and health and safety policies and guidelines.