Project detail - MEGHNA SUGAR REFINERY LIMITED

MEGHNA SUGAR REFINERY LIMITED

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Who is our client

Meghna Sugar Refinery Limited (“MSRL”) is a concern of Meghna Group of Industries (“Group”, “MGI”), one of the largest conglomerates in Bangladesh. The Group is a family owned conglomerate, with a 42 years track record active in sugar, wheat, edible oil, cement, drinking water, ship building and general commodity trading.

Funding objective

The Group wants to expand its current sugar refining capacity and envisages the implementation of a modern sugar refining technology supported by an energy efficient power plant. This will be done through a newly established entity, Meghna Sugar Refinery Limited.

Why we fund this project

Overall, the investment will contribute to the local prosperity in Bangladesh. Specifically, it contributes to increase of food output, creation of additional jobs (direct and indirect) and optimization of resource efficiency.

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 impacts 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. The new refinery is erected on land within the economic zone, which has been in industrial use since many years. Input for the factory is unrefined sugar. There is no direct purchase of sugar cane, and therefore there are no first tier supply chain links with plantations. Based on this PS 5 – Land Acquisition and Involuntary Resettlement and PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources, are regarded as not relevant. There are no Indigenous People (IP), nor impacts on Cultural Heritage. Based on this PS 7 and 8 are also not regarded as relevant. If FMO’s investment proceeds, FMO will periodically review the project’s ongoing compliance with the Performance Standards.

Region
Asia
Country
Bangladesh
Sector
Agribusiness, Food & Water
Signing date
11/26/2018
Total FMO financing
EUR 15.11 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+