Original disclosure @ ADB website
Updated in EWS May 2, 2022
Disclosed by Bank Dec 13, 2021
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According to ADB documents, the proposes investment is a senior unsecured 3-year USD bullet loan of $100 million to finance Louis Dreyfus Company's working capital needs in Asia for the sustainable procurement of coffee, cotton, and rice. The transaction will preserve the livelihood and climate resilience of [60,000] smallholder farmers affected by COVID-19 in the five project countries. A complementing TA (funded by trust funds) will establish 80 farmer groups and train 160 farmer group educators with an aim to help farmers obtain sustainability certifications.
Smallholder farmers in the project countries, who are already vulnerable to climate change, have been further impacted by the coronavirus disease (COVID-19) pandemic and ensuing economic slowdown. LDC, as a sustainable buyer of agricultural projects, supports the livelihoods and climate-adaptive capacity of farmers by providing reliable incomes. The project will assist LDC to maintain its operations in the project countries by funding inventories of coffee, cotton, and rice procured from more than 50,000 farmers in the project countries throughout the COVID-19 pandemic. The attached TA will expand the scope of the extension services already provided by LDC and its affiliates to cotton farmers in India and coffee farmers in Indonesia.
The project is consistent with ADB's Strategy 2030's operational plans for priority 1 (addressing remaining poverty and reducing inequalities) by preserving the livelihoods of smallholder farmers during the COVID-19 pandemic; priority 2 (accelerating progress in gender equality) through gender interventions targeted at women workers and farmers; priority 3 (tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability) by promoting the climate resilience of farmers; and priority 5 (promoting rural development and food security), which calls for the integration of farmers, agribusinesses, and consumers into efficient and sustainable value chains. As a regional project, it is consistent with the operational plan for priority 7 (fostering regional cooperation and integration) as it supports nonsovereign lending for cross-border operations for agriculture value chains. The project is consistent with ADB's country partnership strategies for India, Indonesia, Pakistan, Thailand, and Viet Nam.
The project is aligned with the Operational Plan for Private Sector Operations, 2019–2024, which calls for working with tier 1 agribusiness companies given their potential to have a widespread impact. 26 The project supports ADB’s agriculture-related strategies and action plans of subregional programs. 27 The project is part of ADB’s Comprehensive Response to the COVID-19 Pandemic
The project’s outputs are (i) raw material procurement for agribusiness value chain operations increased, (ii) farmers’ and employees’ livelihoods secured, (iii) cotton farmers’ productivity and resilience to climate change improved in a gender-equitable manner, (iv) coffee farmers’ productivity and resilience to climate change improved in a gender-equitable manner, and (v) gender equality in the workplace enhanced.
ADB proposes to provide an unsecured 3-year loan facility of up to $100 million to LDC. The use of the loan proceeds will be earmarked for permanent working capital in India, Indonesia, Pakistan, Thailand, and Viet Nam.
The proposed $590,000 TA will be cofinanced on a grant basis by (i) ADB’s Technical Assistance Special Fund (TASF) for COVID-19 recovery ($205,000), and (ii) the ADB-managed Strategic Climate Fund ($385,000). The TA will provide capacity building to cotton and coffee farmer groups and farmer group educators in India and Indonesia.
The borrowers are LDC, incorporated in the Netherlands, and LDC Funding SSEA established in Singapore. LDC is a merchant and processor of agricultural goods with a diversified portfolio. Founded in 1851, LDC is a key player in the global agricultural supply chain and is one of the largest merchants of wheat, barley, corn, and oilseeds; a top 5 coffee merchant; and the top private rice merchant. LDC posted consolidated turnover of $33.6 billion and net profit of $383.0 million in 2020. The Louis-Dreyfus family effectively owns about 55% of LDC and Abu Dhabi Developmental Holding Company PJSC (also known as ADQ), a large state-owned holding company based in Abu Dhabi, owns 45%.
|Private Actor 1||Private Actor 1 Role||Private Actor 1 Sector||Relation||Private Actor 2||Private Actor 2 Role||Private Actor 2 Sector|
|-||-||-||-||Louis Dreyfus Co Bv||Client||Agriculture and Forestry|
No contact details provided at the time of disclosure.
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