Project detail - MCS COCA COLA LLC

MCS COCA COLA LLC

Back to map

Who is our client

MCS Coca Cola (“MCSCC”) started its operations in 2001 and has become the largest producer, bottler and distributor of branded soft drinks and water in Mongolia. MCSCC is part of MCS Group being one of the biggest business holdings in the private sector in Mongolia that conducts diversified activities across beverages, telecommunications, energy and real estate sectors.

Funding objective

FMO intends to participate for up-to USD 25 million in USD 110 mln senior and long term EBRD-led syndicated loan facility. The funds will be used to finance MCSCC’s investment programme of the construction of a new mineral water production and bottling plant in Selenge province of Mongolia and partially refinancing the existing loans.

Why we fund this project

FMO wishes to support a major beverage player in Mongolia by proving a long-term capex loan which is essential for companies such as MCSCC. The Project will support i) launching of new product sub-categories in terms of natural mineral water , ii) initiation of exports (and diversification from currently only domestic sales) by selling natural mineral water in high growth and unsaturated markets in neighboring China and other East Asian countries and iii) creating 100 new jobs in rural areas of Mongolia.

Environmental and social rationale

The environmental and social risks associated with the construction and operation of a mineral water bottling plant, and the operation of a logistics distribution network, are site specific and can be managed via the implementation of standard industry practices. Due diligence is on-going in order to assess, and develop any related mitigants, with regard to the sourcing of natural mineral water and the sustainability of utilizing and maintaining such a resource, as well as the effectiveness of construction and contractor management procedures. IFC PS 1-5 are triggered. PS 6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS 7 (Indigenous Peoples) and PS 8 (Cultural Heritage) are not applicable because no impact is expected on biodiversity, no indigenous people are present in the area of influence of MCSCC and no cultural heritage sites have been detected during the assessment. Preliminary E&S categorization is B/B+.

Region
Asia
Country
Mongolia
Sector
Agribusiness, Food & Water
Signing date
2/5/2019
Total FMO financing
USD 18.40 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+