Project detail - City Auto Rice and Dal Mills Limited

Who is our prospective customer?

City Auto Rice and Dal Mills Limited (“CARDML”) is a limited liability company incorporated in Bangladesh and is part of the broader City Group conglomerate. CARDML operates the country’s largest rice and lentil (dal) mill, located in the City Economic Zone near Dhaka. The facility is fully automated with modern Buhler machinery and includes a rice husk co-generation plant, grain assurance laboratory, and storage infrastructure. CARDML plays a critical role in Bangladesh’s food security by processing staple foods for domestic consumption.

What is our funding objective?

FMO is considering a senior secured USD 15 million working capital facility to CARDML to finance the import of pulses. These pulses will be processed and packaged at CARDML’s facility for distribution in the domestic market. The facility is structured as a bilateral corporate loan with a 3-year tenor. The investment supports CARDML’s ability to stable supply of affordable, nutritious food products in Bangladesh.

Why do we want to fund this investment?

FMO’s role is to provide long-term USD financing that is not readily available in the local market. The investment supports CARDML’s strategic focus on processing food commodities, contributing to food security and economic resilience in a Least Developed Country (LDC). This transaction qualifies 100% for the FMO Reducing Inequalities label, as it enhances access to staple foods and supports inclusive economic development.

What is the Environmental and Social categorization rationale?

The investment in City Edible Oil Limited is categorized as B+, with potential adverse environmental or social risks and/or impacts that are generally beyond the site boundaries, largely irreversible, and can be addressed through relevant mitigation measures. The company operates within an established industrial zone and is not involved in any land acquisition or activities that would affect biodiversity-sensitive areas or Indigenous Peoples. The applicable IFC Performance Standards for this investment are PS1 (Assessment and Management of Environmental and Social Risks and Impacts), PS2 (Labor and Working Conditions), PS3 (Resource Efficiency and Pollution Prevention), and PS4 (Community Health, Safety and Security). These standards are triggered due to the nature of the operations, which include grain transport, warehousing, processing, and trading, oil seed crushing and refining, and packaging of edible oils, the associated labor, safety, and environmental considerations. The remaining IFC Performance Standards, PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples), and PS8 (Cultural Heritage), are not triggered, as the project does not involve land acquisition, is not located near ecologically sensitive areas, and does not impact Indigenous communities or cultural heritage sites. The company has demonstrated a willingness to improve its environmental and social performance, and an Environmental and Social Action Plan (ESAP) has been developed to address identified gaps, including the improvement of a Group-level Environmental and Social Management System (ESMS), improvements in labor practices, and enhanced monitoring and stakeholder engagement mechanisms.