31308 - DAP LT Financing

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Summary of Proposed Investment

Project Number

31308

Company Name

NFD Agro Limited

Date SPI Disclosed

Nov 14, 2011

Country

Paraguay

Industry

Agribusiness and Forestry

Projected Board Date

Dec 15, 2011

Status

Completed

Sector

Grains and Beans

Department

Regional Industry MAS LAC & EUR

Environmental Category

B - Limited

Previous Events

Approved : Dec 28, 2011
Signed : Dec 29, 2011
Invested : Feb 10, 2012

Project Description

Desarrollo Agricola del Paraguay S.A. (“DAP” or the “Company”) is one of the leading farming companies in Paraguay. IFC started its relationship with DAP in 2009 with a short term facility followed by an equity investment to support its operations. DAP currently owns more than 26,000 hectares and leases another 8,000 hectares in Paraguay to cultivate soybean, corn and sunflower with a social-inclusive and sustainable approach. It outsources farming operations to local specialized service providers such as seeding, fertilizing, harvesting, storage, and transportation operators.

Desarrollo Agricola del Paraguay LT Financing (the “Project”) consists of providing a corporate long term facility to DAP for the financing of permanent working capital needs to sustain its farming activities in Paraguay.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.0
Equity

Development Impact

DAP is having a significant developmental impact by supporting a more productive farming business model in Paraguay, which is expected in turn to make significant contribution to Paraguay''s rural economic development as well as to global food security. DAP''s main impacts include:

(i) DAP''s innovative approach to establish trust-based relationships with the local peasant communities. DAP''s initiatives help rural families to improve their farming practices, triggering a virtuous circle of development.
(ii) DAP is partnering with leading NGOs and local community organizations to develop outreach programs for rural farmers to improve their access to new markets by (a) capacity building on good agricultural practices, (b) advise on product diversification (e.g. organic products), and (c) improve access to roads and logistic services.
(iii) DAP has contributed to the development of a new class of agricultural service companies and SMEs agri-contractors in frontier rural areas that provide various services and inputs to the Company. DAP supports indirect employment for 850 persons working for more than 44 SMEs agri-contractors, which DAP promotes through trainings, workshops, and social activities.
(iv) DAP contributes to food security by promoting soil conservation agriculture expertise (no-till farming), sustainable pest management (IPM) and world-class farm technology and management, increasing the yields and sustainability of owned and leased farms.

IFC''s Additionality stems from its ability to engage strategically with the Company by offering:

(i) Long-term financing: IFC would provide scarce and highly needed long term financing required to secure an adequate and sustainable capital structure.
(ii) Environmental and Social standards: As an existing client, IFC is continuously monitoring DAP''s operations to ensure full compliance with IFC Performance Standards.
(iii) Demonstration effect: IFC''s ongoing involvement with DAP will send a positive message and reassure investors about the E&S and financial sustainability of a social-inclusive and environmentally sustainable business model in compliance with IFC''s Performance Standards, creating a demonstration effect in the sector.
(iv) Long-term partnership: DAP is keen to continue developing a strategic relationship with IFC for continued support for the successful implementation of its triple bottom line (economic-environmental-social) business model.

Contacts

For Inquiries About the Project, Contact

Guillermo Terol
Gerente Social, Ambiental e Institucional
Address: Avda. España 2045 Edif. JB 3er Piso
Telephone: 595-21 208-450

email: guillermo.terol@dap.com.py

www.dap.com.py

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Washington DC 20433
Telephone: 202-473-3800
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Local Access of Project Documentation

The ESRS and ESAP documentation in English and Spanish is also publicly available locally at the following location:
Location: Fundación Moises Bertoni
Address: Prócer Carlos Argüello Nº 208
Telephone: (59521) 608 740
Fax: (59521) 608 741
www.mbertoni.org.py

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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