The project sponsor is Mr. Petrus Karsten Sr., who established Karsten as a 13ha raisin farm 30 years ago. The Shareholding structure now comprises: Karsten Family Trust (51.95%); Industrial Development Corporation (36.95%); Yarona Farms Limited, a company owned by the employees of Karsten (11.06%) and Bertus Loubser (0.04%).

The total estimated project cost is $1.2 million. The proposed IFC investment is an A Loan (Cleaner Production Loan) of $900,000 for IFC’s account extended through the Cleaner Production Lending Facility (“CPLF”), a $125 million facility approved by IFC’s Board in September 2009 to support Cleaner Production investments among existing IFC clients.

125.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	125.0
Equity

* These investment figures are indicative

The project will be implemented at Karsten’s farms located in the Northern and Western Cape Provinces, South Africa.

The proposed project will help Karsten reduce its high energy costs and its carbon emissions footprint. Karsten will pilot the use of solar panels in farm worker housing, which it can replicate on its other farms. This is in line with IFC’s stated objective of creating demonstration projects that can showcase successful cleaner production efficiencies for others in the sector.

The project fits with IFC’s strategic Climate Change priority and specific corporate objective of supporting investments in energy efficiency and renewable energy. It supports PS3 which explicitly promotes the adoption of cleaner production practices among IFC’s clients. IFC will play a role in identifying and helping to finance such investments that bring about quantifiable benefits in terms of cost savings and positive environmental impacts.

As a Cleaner Production Lending Facility (CPLF), this IFC investment will result in positive environmental impacts from implementing energy efficient measures. These measures were identified by consultants as commissioned by IFC to conduct a Cleaner Production (CP) audit of Karsten’s operations. The energy efficient measures to be implemented include: revamping of the cold storage rooms at the Klein Pella and Roepersfontein farms; efficient lighting and solar water heaters at Klein Pella.

Based on the previous two supervision reviews of the existing portfolio project, the Environmental and Social Risk Rating for the project is B2: Average. In addition, Karsten is in material compliance with IFC’s at approval environmental and social requirements for the existing project. IFC will require annual reporting to determine the impacts of the CPLF supported project.

Based on the nature and scope of this investment, this is a Category C project according to IFC’s Environmental and Social Review Procedure. As such, compilation and disclosure of an Environmental and Social Review Summary document is not required.