30864 - Agricover Credit

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Summary of Proposed Investment

Project Number

30864

Company Name

AGRICOVER CREDIT IFN SA

Date SPI Disclosed

Nov 18, 2011

Country

Romania

Industry

Agribusiness and Forestry

Projected Board Date

Dec 18, 2011

Status

Completed

Sector

Finance Companies

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

Previous Events

Approved : Feb 9, 2012
Signed : Mar 27, 2012
Invested : Jul 9, 2012

Project Description

Agricover Credit (the “Project”) would involve a senior loan of up to €12.5 million to Agricover Credit IFN S.A. (the “Company”) for on-lending to qualified small and medium sized farmers in Romania. The proceeds of the sub-loans would be used to finance working capital expenses, equipment and machinery purchases by farmers.

The Company is the financing arm within the Agricover Group and is the only financial institution in Romania aimed exclusively at agriculture financing.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	16.47
Equity

Development Impact

This project generates multiple developmental impacts:
(i) Increases Access to Finance for Farmers: Romanian farmers would be able to access to long-term debt to finance their investments in agriculture sector, resulting in higher productivity and economic growth.
(ii) Job Creation and Increased Tax Income for the Government: With IFC financing, the Company will be able to grow its business, creating new jobs and resulting in higher revenues and taxable income.
(iii) Support to a Domestic Agriculture Group: The Project will strengthen the Company''s and the Sponsor''s market position and improve its competitiveness in agriculture sector.

Long Term Financing: IFC will provide long-term debt which is not readily available in the market.
- Sectoral Know-how: Agricover Group will benefit from IFC''s global know-how and network in agribusiness in order to become a stronger player.
- Standard Setting: Implementation of insurance and E&S standards in the Company and adoption of IFRS based audited financials by the Company and the Sponsor.

This project has been classified as a Category FI project according to IFC''s Environmental and Social Review Procedure and will involve financing SME sectors with agribusiness activities. IFC''s appraisal focused on Agricover Credit IFN’s capacity to develop and implement an Environmental and Social Management System (ESMS) to comply with the IFC Exclusion List; the national environment, occupational health and safety, and social regulations; and IFC’s Agribusiness/Food Production Guidelines and the agribusiness related Environmental & Social risks. IFC also appraised Agricover Credit IFN''s labor policies against IFC''s Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Mr. Robert Arsene
General Manager, Agricover Group
28-32, Stan Tabara Street, District 5
Bucharest, Romania
Tel: +4021.336.46.45
Email: office@agricover.ro or Robert.Arsene@agricover.ro
www.agricover.ro

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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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