Project detail - City Edible Oil Limited

Who is our prospective customer?

City Edible Oil Limited (“CEOL”) is a limited liability company incorporated in Bangladesh and is part of the broader City Group conglomerate. The company refines and packages edible oils and related food products under well-known brands such as TEER. City Group and CEOL are key players in Bangladesh’s food manufacturing industry.

What is our funding objective?

FMO is considering a senior secured USD 10 million term facility to City Edible Oil Limited to finance capital expenditures for the installation of an energy-efficient bottling plant. The facility is structured as a bilateral corporate loan with a 7-year tenor and aims to improve access to staple food products while advancing public health outcomes. Specifically, the investment supports a transition from bulk edible oil sales to more hygienic, fortified, and packaged alternatives.

Why do we want to fund this investment?

FMO’s role is to provide long-term financing that is not readily available in the local market. The investment supports CEOL’s efforts to modernize its operations and improve environmental sustainability. This investment qualifies 100% for the FMO Green label due to its focus on energy-efficient packaging, and 100% for the FMO Reducing Inequalities label, as it promotes access to staple food products in a Least Developed Country (LDC) and aims to help ease food price inflation.

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.