Project detail - NETAFIM LTD


Status: Approved investment
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The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.

Who is our customer

Netafim is the global leader in precision irrigation for a sustainable future. With 33 subsidiaries, 17 manufacturing plants and approximately 5,000 employees and contracted associates worldwide, Netafim delivers innovative, tailor-made irrigation and nutrigation solutions to millions of farmers, allowing smallholders to large-scale agricultural producers in over 110 countries to Grow More with Less™. Founded in 1965, Netafim pioneered the drip revolution, creating a paradigm shift toward precision irrigation. In 2017, Orbia, a global leader in specialty products and innovative solutions, acquired 80% of Netafim. Kibbutz Hatzerim holds the remaining 20%.

What is our funding objective?

FMO participates with USD 12.9 million in an IFC-led syndicated facility to Netafim Ltd and its Chinese subsidiary. Netafim will use the loan proceeds to get a stronger foothold in Africa, where the enormous growth potential for drip irrigation is, and to further expand in China.

Why do we fund this investment?

Netafim is the largest provider of micro-irrigation systems to large- and smallscale farmers. Micro-irrigation (or precision irrigation) is a crucial tool to enhance food production while saving scarce resources such as water and land. In the context of continuous population growth, changes in weather patterns, biodiversity decline, water scarcity and desertification, irrigation is essential to ensure food security.

What is the Environmental and Social categorization rationale?

Based on Environmental and Social (E&S) risks/impacts and country/regional context the E&S risk category is B. Material E&S risks and impacts include the following: those associated with the manufacturing of the micro-irrigation components, notably the use of energy and water, the efficient use of raw material inputs, the management of waste and their recycling or proper disposal, and the appropriate management of the company’s human resources and compliance with the labor laws of the countries in which the manufacturing operations are located. E&S risks will be mitigated by the implementation of an Environmental and Social Action Plan. The relevant IFC Performance Standards are PS1 to 3 (Management, Labour and Resource Efficiency). PS4 to 8 (Community, Resettlement, Biodiversity, Indigenous People and Cultural Heritage) are not applicable as sites are in industrial areas and accordingly do not pose a risk to communities. There are no armed security guards present. In addition, the land used to locate manufacturing/production facilities is either on long term agricultural land or land designated and used for industrial purposes (i.e. industrial parks), is obtained using market-based transactions without the need for economic or physical resettlement and does not impact indigenous peoples or cultural heritage.

Agribusiness, Food & Water
Effective date
Total FMO financing
USD 8.00 MLN
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)