Project detail - ENI Natural Energies Congo SAU

Who is our prospective customer?

Our indirect borrowers, through the International Finance Corporation (IFC), are subsidiaries of Eni Natural Energies S.p.A. (“Ene”) in the Republic of Congo, Angola and Mozambique Ene is a wholly owned subsidiary of Eni S.p.A., the Italian integrated energy group operating across the energy value chain. As part of its decarbonization strategy, Eni is expanding its biofuels business and Ene is securing feedstock for Enilive biorefineries with vertical integration projects. The proceeds will go to three subsidiaries: Ene Angola, Ene Congo, Ene Mozambique. The three subsidiaries obtain feedstock from agricultural activities (from local commercial farmers and aggregators) and valorization of agro-industrial and forestry residues for biofuel production. Ene Congo operates a vegetable oil extraction facility (Agri Hub) while Ene Angola and Ene Mozambique have tolling-agreements with external crushing companies for their feedstock processing. The produced vegetable oil supplies Eni’s biorefineries in Italy.

What is our funding objective?

The Project consists of an IFC-led USD 400mln senior unsecured facility, of which FMO participates as a B-lender for up to USD 150mln, to support the expansion of Eni’s sustainable biofuel feedstock supply chain in Angola, Congo-Brazzaville and Mozambique, including the development and operation of Agri Hubs, purchases of agricultural equipment and inputs, and working capital for sourcing oilseeds from local farmers, aggregators and intermediaries.

Why do we want to fund this investment?

The transaction supports the decarbonization of transport sectors, as biofuels can contribute to a significant reduction of Greenhouse gases (GHG) emissions compared to fossil fuels when calculated along the entire supply chain. It also creates agricultural value chains, income opportunities and supports rural development in underserved African markets, including in Angola and Mozambique which are classified by local authorities as Least Developed Countries (LDCs). FMO’s investment aims to support activities that contribute to climate mitigation, contributing to SDG 13, in line with FMO’s methodology for determining green finance attribution. In addition, the transaction aims to support activities that generate financial flows to LDCs, contributing to SDG 10. Beyond its climate and social impact, the project is expected to have a demonstration effect by establishing commercially viable, certified biofuel feedstock supply chains in underdeveloped markets. FMO’s participation as a B-lender in the IFC-led facility also helps mobilize long-term financing at a scale and tenor not currently available to agribusiness companies operating in Angola, Congo-Brazzaville and Mozambique.

What is the Environmental and Social categorization rationale?

The E&S category for this project is B+, as defined by FMO's Sustainability Policy, aligning with IFC's categorization as B. It reflects limited and site-specific Environmental & Social (E&S) risks associated with the operation of agro-hubs and feedstock production in Angola, Congo-Brazzaville and Mozambique. E&S risks associated with feedstock sourcing are considered relatively limited as supply is expected to originate primarily from commercial farms with mechanized operations, where crops are cultivated in rotation with food crops and grown on underutilized or degraded land. Eni applies farm selection criteria and certification requirements designed to exclude farms associated with deforestation, natural habitat conversion or involuntary displacement. In addition, social and biodiversity screening forms part of the ISCC-EU certification. PS1(Risk Management), PS2 (Labor), PS3 (Resource Efficiency), PS4 (Community) and PS6 (Biodiversity) are applicable to the transaction. Key E&S risks include the effective implementation of Eni’s E&S Management System across the value chain, labor and working conditions, community health and safety, biodiversity protection, food security risks, and stakeholder engagement. Eni’s existing E&S framework is broadly aligned with Good International Industry Practices and is being further strengthened to support the expansion of its agri-feedstock operations. Given that this is a B-participation, FMO follows the lead of IFC in its environmental and social due diligence on the company. For more information, please see IFC’s disclosure website (50728 - Eni PanAfrica).