Project detail - YEMEN COMPANY FOR SUGAR REFINING

YEMEN COMPANY FOR SUGAR REFINING

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Who is our client

HSA Foods consists of six companies (the “Co-Borrowers”), members of the HSA Group namely, (i) National Dairy and Food Company Taiz; (ii) National Dairy and Food Company Hodaida; (iii) Yemen Company for Sugar Refining; (iv) Yemen Company for Flour Mills and Silos Aden; (v) Yemen Company for Flour Mills and Silos Al Hodaida; and (vi) Al Hodaida Flour Mills Co. Limited.

Funding objective

FMO participates for USD 20mln in a USD 75mln debt facility (the “Facility”) led by IFC. The funds will be used by the Co-Borrowers to prepay their raw materials, foodstuff commodities, predominantly wheat, raw sugar and powdered milk.

Why we fund this project

According to the United Nations, the condition in Yemen is close to a famine and almost half of the population is experiencing high levels of food insecurity. The facility will help the Co-Borrowers increase the imports of raw materials for the production of the most basic foodstuffs, i.e., flour, sugar and dairy in volumes that will materially improve the nutrition of the population.

Environmental and social rationale

HSA Foods is a category B+ client. FMO’s preliminary environmental and social due diligence indicates that the investment may 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: Labour and working conditions; - PS 3: Resource Efficiency and Pollution Prevention - PS 4: Community Health, Safety and Security; and - PS 6 Biodiversity Conservation. - PS 5 Land Acquisition and Involuntary Resettlement is not applicable since there is no land acquisition or economic displacement associated to the financed activities; - PS 7 Indigenous people is not applicable since no indigenous people are directly or indirectly affected by the financed activities and PS 8 Cultural Heritage is not applicable since the financed activities do not affect any tangible or intangible cultural heritage. FMO will periodically review the project’s compliance with the Performance Standards.

Region
Asia
Country
Yemen
Sector
Agribusiness, Food & Water
Signing date
5/12/2021
Total FMO financing
USD 20.00 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+