The project sponsor is the Wings Group, which is a well established private Indonesian conglomerate. Their core business is in soap and detergents.

The total project cost is estimated at $16 million. The proposed IFC investment includes up to a $8 million Loan to PT SAS through a combination of A and B loans.

4.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	4.50
Equity

* These investment figures are indicative

The company is located in Palembang, Sumatra. The company’s factory is in a recently established industrial zone, close to the urban center of Palembang.

The project is expected to have the following development impacts: - generate new employment, primarily of women; - increase income tax revenues paid to the government of Indonesia; - increase in consumer surplus through increased competition in a food staple product consumed by the poor; and - increase revenue and profits of small and medium sized enterprises which sell the company’s products.

IFC’s expected development contribution may include: - providing long-term local currency financing; - assistance in helping the company comply with IFC’s Environmental & Social Performance.

This is a Category B project under IFC’s Policy on Social and Environmental Sustainability 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, design criteria, local regulations and industry certification schemes. Environmental, social, health and safety issues which may be associated with this type of project, and which were reviewed during appraisal, included:

- land acquisition and plant siting;
- management systems for environmental, health and safety (EHS), and life and fire safety issues;
- compliance with local and WB/IFC requirements for air emissions, wastewater discharges, indoor air quality, noise and waste management;
- energy, water and other material use and efficiency;
- labor issues and community engagement.

This new plant is the further expansion of the Wings Group’s noodles operations in Surabaya and Jakarta, which have been financed by IFC and previously assessed as Category Bs. The existing investments have submitted AMRs in a timely fashion and are categorized as ESRR B-2 Satisfactory.

While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management Systems;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health and Safety;
- PS5: Land Acquisition and Involuntary Resettlement; and
- PS6: Biodiversity Conservation and Sustainable Natural Resource Management.

This ESRS assesses the project against the above Performance Standards. The project was not assessed against PS7 on Indigenous People or PS8 on Cultural Heritage as the project does not impact on either Indigenous Peoples or known Cultural Heritage.

In addition, the following Guidelines are applicable to this project:

- Environmental, Health and Safety General Guidelines, dated April 30, 2007; and
- Environmental, Health and Safety Guidelines for Food and Beverage Processing, dated April 30.