Project detail - GH2 Industries (Pvt) Ltd

Who is our prospective customer?

GH2 was founded in September 2020 in Lahore, Pakistan, with the purpose of setting up a vertically integrated agri-based manufacturing facility to source (broken) rice and produce rice derivatives for the local and export markets. GH2 is set up by a Pakistani group specialized in developing green energy projects. The project will be based near Gharo, Thatta district, in Sindh province.

What is our funding objective?

This concerns a greenfield project, or a newly designed project that lacks constraints imposed by previous work. GH2 plans to convert agricultural by-products and local raw materials to value-added products and expand on the export base of the country through a diversified product mix. The project offers a unique integrated and sustainable business model where key inputs including agri feedstock, power and steam are partially or fully produced in-house and various production waste streams are responsibly converted to commercially useful by-products.

Why do we want to fund this investment?

The proposed transactions will promote a circular business model which is important for sustainability. Also, the transactions will benefit Pakistan economically by increasing exports. Additionally, the project will help create jobs, strengthen food production & security, and will improve farmer livelihoods. GH2’s vision aligns with FMO’s in promoting sustainable rice farming in Pakistan with plans to increase farmer resiliency and limit climate impact. The transaction is expected to receive a 100% Green Label.

What is the Environmental and Social categorization rationale?

GH2’s E&S risk category is B+. The main identified E&S risks are: 1) E&S management system implementation, this will start at construction which has not yet commenced and 2) E&S and in particular Occupational Health & Safety and labour standards knowledge and capacity of contractors and suppliers. The contractor and supplier risks are increased by the Human Rights and contextual risks for workers in agriculture and businesses in Pakistan. The following IFC Performance Standards are applicable: PS1 to 4 are applicable: Assessment and Management of E&S Risks and Impacts, Labour and Working Conditions, Resource Efficiency and Pollution Prevention, and Community Health, Safety and Security. The land was procured from a single seller - a private limited company, on a willing seller, willing buyer principle. No significant vegetation of economic or biodiversity value was observed on the project land. There is also no evidence of peoples identifying as ‘indigenous’ in or around the project area and no cultural heritage sites are known on or near the site. Based on this PS 5, PS 6, PS 7, and PS 8 (Involuntary Resettlement, Biodiversity, Indigenous People and Cultural Heritage) are not considered applicable.

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Date	Total FMO financing
5/1/2024	USD 5.00 MLN