PRAN Agro Business Ltd (IFC-40929)

Countries
  • Bangladesh
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
PRAN Agro Business Ltd
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 85.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 30.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Mar 29, 2019

Disclosed by Bank Apr 11, 2018


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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The group of companies known as PRAN Group (“PRAN” or the “Group”) was established in 1981 and is a branded food and beverage group and the largest agro-processor in Bangladesh. PRAN has its production facilities at 13 locations. IFC approved processed debt investments in 2009 (project#27005 for a number of PRAN companies defined together as PRAN Group), 2011 (project#30568, for PRAN Dairy Limited expansion) and 2012 (project#31829 for Natore Agro Limited (NAL)). There is no formal holding company structure at PRAN and every large expansion is typically set up under a new entity. For previous IFC investments, IFC had defined six entities (all in the food/dairy sector) within PRAN as “PRAN Group” for its investments. The outstanding loans for IFC are at PRAN Dairy (till 2018) and NAL (till 2019). The proposed investment is a senior loan of US$30 million for a capacity expansion of several of its existing food products (fruit juices, biscuits, noodles, and spices) through a US$65 million capital expenditure investment at PRAN Agro Business Limited (PABL) as well as local currency working capital facilities totaling BDT 1,600 mm (up to US$20 million) to Pran Agro Limited (PAL) and NAL for a total project cost of approximately US$85 million (the “Project”). The capacity expansion would be undertaken at two new facilities being established by PABL at Natore (~200 km north west of Dhaka) (“PABL-Natore”) and Rajshahi (~260 km north west of Dhaka) (“PABL-Rajshahi). The expansion will include the following components:(a) setting up an aseptic pulping facility in Rajshahi for increasing fruit-based beverage capacity;(b) increasing production capacity of spice products;(c) expansion of noodle-making capacity and backward integration into flour milling;(d) developing a distribution channel of 1,500 distributors; (e) modernizing existing operations.PABL-Rajshahi currently has installed a pulping line and a warehouse whereas PABL-Natore has a warehouse, peanut mill installed and a scrap yard (common for this facility as well as NAL). The other parts of the both the facilities are also under construction. Considering multiple products will be manufactured at these facilities and size of the facilities, the construction is expected to continue for another 2-3 years.

Investment Description
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The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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