Agrokor is a leading food and retail company in the Balkans, with 30,000 staff, and operations in Croatia, Serbia, Bosnia and Herzegovina, Slovenia and Hungary. Over the last thirty years, Agrokor has expanded from a small family business for flower and trade, into a €2.8 billion private company, owned 92% by Mr. Ivica Todoric, the founder and President, and 8% by EBRD.

The proposed IFC investment is a €40 million A loan for IFC’s own account.

60.16 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	60.16
Equity

* These investment figures are indicative

Belje is located in the Baranja province, not far from the town of Osijek, in Eastern Croatia. Belje operates about 20,000ha of arable land for crop and livestock farming. PIK Vrbovec’s slaughterhouse and fresh and processed meat production facilities are located about 40 km away from Zagreb near the city of Vrbovec.

The project is to modernize and expand the production capacity of Belje and PIK Vrbovec, respectively involved in farm production and meat processing. This will contribute to the efficiency of the sector, and improve the cost structure of crop, livestock and meat production in Croatia.

The project will also contribute to maintain and generate employment and SME development in Slavonia, a relatively depressed rural area in Croatia, which is distant from the more prosperous touristic coast and busy capital city area.

- Long term, counter-cyclical financing:

Despite the Sponsor’s long standing good reputation on the market, securing financing with longer enough tenures to match the long term nature of the group’s agribusiness investments in PIK Vrbovec and Belje would be challenging under current financial market conditions. IFC can tailor a suitable loan repayment structure to allow durable investments necessary for the companies’ growth.

- Environmental and Social Standards:

IFC’s repeated involvement with the Project would help strengthen the Companies’ progress on sustainable environment practices during their current rapid growth phase.

- Long term partnership:

As Agrokor keeps growing through strategic acquisitions and internal capital investments both domestically and abroad, IFC welcomes the long term partnership, to support Agrokor’s regional expansion strategy.

IFC''s early review of this investment has identified the following environmental, social, health and safety issues:

- performance against requirements in the earlier IFC investment;
- development and implementation of integrated management systems encompassing quality, environmental and social affairs;
- animal husbandry and disease control;
- food safety;
- emissions to the environment (air, wastewater and solid waste, odors, and noise);
- clean production and eco-efficiency in processing operations including minimization of water use and wastewater production, recycling, and efficient use of energy;
- management of hazardous materials and hazardous wastes;
- occupational health, safety and emergency response;
- life and fire safety; and
- social issues along with community development.

While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts that 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
- PS4: Community Health, Safety and Security

Based on this early review, it is anticipated that this investment will require 30 days disclosure by IFC prior to Board and has been provisionally categorized as B.

This is a repeat investment in this company. The company is under supervision for the existing IFC investment and has made excellent progress on inherited environment and social issues. The current Environmental and Social Risk Rating (ESRR) is B2-Average.