Project detail - BURAPHA AGRO-FORESTRY CO. LTD

BURAPHA AGRO-FORESTRY CO. LTD

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Who is our client

Burapha is a Lao-Swedish joint venture with forest plantations and processing capacity, which develops and manages agroforestry plantations in the greater Vientiane area (Laos). Burapha’s strategy is to increase its plantation base and to build a plywood mill of nominal capacity 59,000 m3, with the ultimate objective to produce cost competitive and sustainable FSC certified wood products, mainly plywood, for export and the domestic market.

Funding objective

The proposed funding will be used for CAPEX of the plywood mill and expansion of plantations from 3,540 ha to 7,000 ha by the end of 2019.

Why we fund this project

The proposed transaction fits with the agribusiness strategy and forestry strategy due to: i) the region (Laos), (ii) sector (Agro-forestry) with integrated production and processing, iii) catalysing/cooperation with preferred partner DFIs; iv) acceptable risk/ return balance; v) green and inclusive transaction.

Environmental and social rationale

The project is considered to be a medium high risk, category B+ project, based on general limited potential adverse social or environmental impacts that are mainly site specific and can be mitigated by normal industry practices. IFC Performance Standards 1 to 7 are applicable: E&S Management, Labour (circumstances), Pollution Prevention, Community, Land Acquisition, Biodiversity and Indigenous People. Performance Standard 8, Cultural Heritage is not relevant, there have been nor are expected areas of cultural significance to be impacted by Burapha’s operations. The client will comply with the IFC Performance Standards (IFC PS), the General IFC/WB EHS Guidelines and the sector-specific EHS guideline: Forest Harvesting Operations and Sawmilling and Wood-based products and will maintain FSC certification for its operations.

More investments

Date Total FMO financing
12/10/2018 USD 5.00 MLN
Region
Asia
Country
Lao People's Democratic Republic
Sector
Agribusiness, Food & Water
Signing date
12/10/2018
Total FMO financing
USD 5.00 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+