The project sponsor is Grupo Pellas, one of the largest and more diversified corporations in Central America. Grupo Pellas, based in Nicaragua, is a family-owned private group that has stakes in energy, sugar, ethanol, automobile, banking and credit card companies. Members of the local Pellas, Bernard, Palazio, and Chamorro families are majority shareholders in the company.

The total project cost is estimated at $62 million. The proposed IFC investment is a $25 million A loan for IFC’s own account and a syndicated B loan for up to $30 million.

25.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
Equity

* These investment figures are indicative

The sugar mill, ethanol plant, and plantations are located in Chichigalpa, Chinandega, in northwest Nicaragua approximately 30 km from the port of Corinto.

The project will support the financial sustainability of an important contributor to a sector of vital importance to Nicaragua’s economy, as sugar is one of Nicaragua’s main exports. The sustainability of the sugar sector will help maintain employment levels in areas highly dependent on cane-growing and milling for income.

IFC is providing long-term financing with tenors not currently available in Nicaragua. IFC will also serve a catalytic role by mobilizing foreign banks to participate in Nicaragua under its B Loan program.

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 and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria.

Environmental and social review of the project encompassed evaluation of an environmental impact study commissioned by NSEL. In addition, IFC professional staff performed a physical evaluation of the project site and environs.

Nicaragua Sugar Estates Limited (NSEL) is the proprietor of the agro-industrial complex Ingenio San Antonio (ISA) or San Antonio Sugar Mill, whose principal activities include:

- Growing, processing and commercialization of raw and refined sugars and by-products such as molasses and ethanol using approximately 24,223 Ha of cane field, of which 15,106 Ha is owned or leased land;
- Production and sale of electrical energy to the national grid; and production of shrimp

NSEL has a well implemented management system which includes management of environmental & social performance at their operations. NSEL will have a proactive approach to resolving the impacts listed below.

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
- Voluntary relocation of company workers to improved housing in “La Candelaria” housing project
- Environmental planning and permits
- Management of emissions to the environment (liquid effluent, solid waste and air emissions)
- Hazardous material management
- Biological and chemical control of pest and disease
- Biodiversity and natural resources management, including certification of sustainable forest management for eucalyptus plantation
- Working conditions for direct and contracted employees, including sugar cane workers
- Occupational health and safety in plantations and facilities
- Sources of sugar cane
- Community engagement, disclosure, and development at the Chichigalpa area

The identified environmental, social and health and safety impacts which require ameliorative activities are summarized in an Environmental Action Plan (EAP) that NSEL will implement as part of IFC’s Loan Agreement. Upon successful implementation of the agreed mitigation measures, the proposed Project will meet Nicaraguan laws and regulations as well as the applicable IFC performance standards.