The project sponsor is Pantaleon, a private company based in Guatemala, founded over 100 years ago. Pantaleon is majority owned by members of the Herrera family.

The total amount of Pantaleon’s 2004-2008 investment program is estimated at $210 million. The proposed IFC investment is a $20 million A loan to Pantaleon. IFC is also considering a separate $50 million A loan to Monte Rosa, S.A., a fully owned subsidiary of Pantaleon located in Nicaragua (described in the SPI# 26009). Both loans are corporate loans, and will be for IFC’s own account.

70.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	70.0
Equity

* These investment figures are indicative

Pantaleon has three sugar mills: Pantaleon mill, Concepcion and Monte Rosa. The Pantaleon and Concepcion mills are located in the south of Guatemala, in the Department of Escuintla, approximately 53 and 37 miles from Guatemala city respectively. Monte Rosa is located in the Department of Chinandega, approximately 92 miles from Managua.

The investment is expected to have the following development impacts: - support the financial sustainability of an important contributor to a sector of vital importance to both Guatemala and Nicaragua’s economy, as sugar is one of the main exports for both countries; - help maintain employment levels in areas highly dependent on cane-growing and milling for income; - increase volume of cane purchased from independent growers of cane; - support renewable energy produced both by cogeneration and ethanol; - support the company’s corporate social responsibility efforts through increasing contributions (based on sugar produced) to Fundación Pantaleon; and - increasing tax revenues to the governments of Nicaragua and Guatemala.

IFC’s expected development contribution may include: - providing long-term financing; - mitigating political risk in Nicaragua; - assistance in helping the company comply with IFC’s Environmental & Social Performance standards, which is also likely to have a demonstration effect within the industry; - providing technical assistance in the areas of environment and sustainability; and - providing global industry and corporate governance expertise.

This is a Category B project according to IFC''s Environmental and Social Review procedure because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Applicable Performance Standards (PS) are:

- PS1: Social and Environmental Assessment and Management System
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
- PS 5: Land Acquisition and Involuntary Resettlement,
- PS 6: Biodiversity Conservation and Sustainable Natural Resource Management
- PS 8: Cultural Heritage

Environmental and social review of the project included evaluation of environmental and social information presented by Pantaleon. In addition, IFC professional staff performed a physical evaluation of the project sites and environs. Key issues identified will be addressed as detailed in the Environmental and Social Action Plan (ESAP). Please refer to the Environmental and Social Review Summary (ESRS).