Ecua America Teak S.A.S. (FMO-63929)

Countries
  • Ecuador
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Netherlands Development Finance Company (FMO)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
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."
Voting Date
Dec 16, 2022
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Ecua America Teak (“EAT”)
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)
$ 3.00 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 @ FMO website

Updated in EWS Sep 9, 2024

Disclosed by Bank Aug 5, 2024

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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.

According to the Bank’s website, Ecua America Teak ("EAT"), an Ecuadorian forestry company, intends to expand the existing plantation by another 500 ha, upgrade its sawmill and acquire new machinery and equipment within the next years. FMO will finance this expansion with the proposed loan.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

This concerns an E&S B+ categorized investment, as the company engages in primary production and primary processing of teak (own operations and a supply chain) which comes with potential adverse environmental or social impacts that extend site boundaries and might in part be irreversible, although they can be prevented and addressed through relevant mitigation measures. E&S characteristics of this specific investment include assessment of the land acquisition process, history of the land and no deforestation, production practices and use of agrochemicals, labour and accommodation conditions, organizational Health and Safety, biodiversity, and pollution risk management. The E&S context include potential environmental and social risks in their company's supply chain -not limited to- child labor, and poor working conditions.

FMO's environmental and social due diligence indicates that the investment will have impact which must be managed in a manner consistent with the following IFC Performance Standards in particular: PS 1 - Assessment and Management of Environmental and Social Risks and Impacts PS 2 - Labor and working conditions PS 3 - Resource Efficiency and Pollution Prevention, PS 4 - Community Health, Safety and Security, and PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources.

The following Performance Standards, PS 5 Land Acquisition and Involuntary Resettlement, 7 Indigenous Peoples and 8 Cultural Heritage, are not applicable in this period, as the land have been acquired through willing buyer-willing seller transaction, and no impact on Indigenous Peoples, nor cultural heritages has been identified.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Funding: FMO NV (loan)

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Ecua America Teak (“EAT”) is an Ecuadorian forestry company with a total land bank of 1,085 ha, consisting of 869 ha planted with high-quality teak and a sawmill to produce boards and blocks. EAT is an investee company of Arbaro Fund; a fund focused on sustainable forestry projects in Latin America, the Caribbean, and Sub-Saharan Africa.

Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - Ecua America Teak (“EAT”) Client -

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Arbaro Fund: https://www.arbaro-advisors.com/investments/

Ecua America Teak (“EAT”)
Headquarters: Samborondon, Guayas
Phone: 

ACCESS TO INFORMATION

As part of FMO's ex-ante disclosure (disclosure of transactions before contracting), you can send requests or questions for additional information to: disclosure@fmo.nl

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW). A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism

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How it works