Louis Dreyfus COVID-19 Climate-Resilient Smallholder Farmer Recovery Project (ADB-53298-001)

Regions
  • East Asia and Pacific
  • South Asia
Geographic location where the impacts of the investment may be experienced.
Countries
  • India
  • Indonesia
  • Pakistan
  • Thailand
  • Vietnam
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Development Bank (ADB)
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
C
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 13, 2021
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
Louis Dreyfus Company B.V.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
  • Climate and Environment
  • Technical Cooperation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Advisory Services, Grant, Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 100.59 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)
$ 100.00 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.
Grant Amount (USD)
$ 0.59 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.
Project Cost (USD)
$ 296.50 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 @ ADB website

Updated in EWS May 2, 2022

Disclosed by Bank Dec 13, 2021


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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 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.

 

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

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.

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.

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

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.

No contact details provided at the time of disclosure.

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.adb.org/forms/request-information-form

ADB has a two-stage appeals process for requesters who believe that ADB has denied their request for information in violation of its Access to Information Policy. You can learn more about filing an appeal at: https://www.adb.org/site/disclosure/appeals

ACCOUNTABILITY MECHANISM OF ADB

The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main.

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