28472 - Export Trading Group Guarantee

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Summary of Proposed Investment

Project Number

28472

Company Name

EXPORT TRADING CO.LIMITED

Date SPI Disclosed

Oct 23, 2009

Country

Eastern Africa Region

Industry

Agribusiness and Forestry

Projected Board Date

Dec 3, 2009

Status

Completed

Sector

Grains and Beans

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Dec 10, 2009
Signed : May 26, 2010

Project Description

Export Trading Group (ETG) is a leading commodity supply chain operator based in East and Southern Africa. Its main businesses include (a) trading and distribution of agricultural products and fertilizers, (b) farming of maize, rice, soybean, wheat, etc., (c) processing of maize, pigeon peas, rice, etc. and (d) investments in information technology, mining, leisure, forestry and logistics. ETG is composed of about 75 entities (some of them dormant) and employs about 3,000 permanent staff.

ETG achieved strong growth in its trading operation due to the increase in the global demand for commodities and the group’s competitive positioning (strong origination, storage and transportation capabilities and diversification into new products and markets). To take advantage of its leading position, ETG plans to expand its trading operation by obtaining additional trade finance facilities (the “Project”). The proposed IFC investment is to provide guarantees for the trade finance facilities under the Project.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	60.0
Loan
Equity

Development Impact

• Support to and, access to markets by, small farmers: By increasing its purchase capacities, ETG would (a) offer outlets for small-farmers’ production which typically faces significant post-harvest losses and (b) contribute to reduce the price volatility of domestic crops in East and Southern Africa.
• Employment: New jobs will be created as part of the contemplated Project.
• Demonstration effect: IFC’s proposed investment will send a positive signal to the market at a time when many financial institutions are reducing their commitments to Africa and the agribusiness sector.

provide or contribute to mobilize additional financing;
ultimately help ETG prioritize its investments, structure its selected projects, review its shareholding and reach high standards of operations and corporate governance;
the group will benefit from IFC’s global expertise and its past experience in this sector;
IFC''s participation will provide confidence for potential investors to participate and support agricultural production in Africa; and,
the inclusion of IFC’s environmental and social sustainability standards and the monitoring of compliance by IFC will reinforce the group’s practices and have a positive impact on the sector.

The Environmental, Health, Safety and Social (EHSS) impacts of the project’s operations are relatively limited. IFC’s review did not identify any significant adverse impacts. Issues to address, as captured in the attached Environmental & Social Action Plan, include:

· improvements in social and environmental management systems (including supply chain management, human resources, occupational health & safety monitoring and reporting, and fleet management),
· development of a pesticide management plan,
· improvement of life & fire safety arrangements at key storage facilities, and
· resolution of a resettlement-related issue at one of the Sponsor’s subsidiaries, i.e. ETC – Bio-Energy Limited’s Mpongwe Farm.

These matters can all be addressed using standard mitigation methods. Based on these considerations, this is a Category B project according to IFC’s Environmental & Social Review Procedure.

Contacts

For Inquiries About the Project, Contact

Jean Craven
9th floor, Harbour View Towers
Samora Avenue
P.O. Box 10295,
Dar-es-salaam.
Tel : +255 767445520
Fax :+255 22 2112341
Email : info@etcagro.com
http://www.exporttradinggroup.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

The project documentation for public viewing as agreed to between the Export Trading Group and the IFC can be accessed from the Export Trading Group via the Dar es Salaam Office (contact Vasudev Barkur) or via the Johannesburg office (contact Jean Craven). The full contact details are provided below.

Vasudev Bakur
9th Floor, Habour View Tower, Samora Avenue
P.O.Box 10295, Dar es Salaam, Tanzania
Tel: 255 22 211 6094 / 2117212
Fax: 255 22 211 2341 / 2112493
Email: vasudev@exporttradinggroup.com

Jean Craven
Export Trading Group
6th Floor, South Wing, Sandton City Office Towers
Cnr Rivonia & 5th Street, Sandhurst, 2196
P.O. Box 78637, Sandton, 2146
Tel: 27 11 783 5238
Fax: 27 11 783 5341
Email: jean.craven@exporttradinggroup.com

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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