Project detail - GOBIND SUGAR MILLS LIMITED

GOBIND SUGAR MILLS LIMITED

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Who is our client

Gobind Sugar Mills Limited (‘Gobind’), incorporated in 1952, belongs to the Adventz Group. One of the most efficient and rapidly growing companies in the sugar industry, Gobind produces sugar at the Aira factory in Uttar Pradesh that has a crushing capacity of 10,000 tonnes of sugarcane per day. The sugar factory is equipped with state of the art technology to produce crystal cane sugar of the highest purity. The Company is listed at Calcutta Stock Exchange (CSE). and Metropolitan Stock Exchange of India Limited (MSEI).

Funding objective

FMO is providing a US$ 16 mln loan facility. Gobind will use these funds for their ongoing expansion program, which includes a bagasse based co-generation facility for the production of green power and a distillery facility for the production of ethanol (biofuel) from molasses.

Why we fund this project

The sugarcane sector in India is the second largest agro-based industry after cotton and forms the major source of income for over 50 million farmers. The Gobind mill is the primary source of living for 64,000 farmers in one of the backward regions in India. By reviving and supporting the conversion of Gobind into a modern, green sugar mill with zero discharge and diversified income streams, FMO aims to create a viable business, which is able to withstand adverse circumstances in the cyclical sugar sector. At the same time, the funds will contribute to the support of these farmer families, which depend for their livelihood on the sugar mill and its services.

Environmental and social rationale

While all Performance Standards are applicable to this investment, FMO’s environmental and social due diligence indicates that the investment will have impact which must be managed in a manner consistent with the following Performance Standards. PS 1 – Assessment and Management of Environmental and Social Risks and Impacts PS 2 – Labor and working conditions PS 3 – Resource Efficiency and Pollution Prevention PS 4 – Community Health, Safety and Security If FMO’s investment proceeds, FMO will periodically review the project’s ongoing compliance with the Performance Standards. Issues related to PS5: Land Acquisition and Involuntary Resettlement are not expected with this investment as no new land will be required to be obtained (acquisition already occurred in 2013); PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resource is also not triggered as no critical habitat or endangered species are located within the project area; PS7: Indigenous Peoples are not impacted by the company’s operations; and PS8: Cultural Heritage is not triggered with this investment.

Region
Asia
Country
India
Sector
Agribusiness, Food & Water
Signing date
10/6/2017
Total FMO financing
USD 16.00 MLN
Fund
FMO
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B+