|Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.|
This summary covers an investment by the Industrial Development Corporation of South Africa (IDC) and Africa Juice BV of Netherlands in Africa Juice Tibila Share Company (“Africa Juice TSC”). The sponsors have applied for MIGA guarantees covering IDC’s $5 million non-shareholder loan, as well as Africa Juice BV’s $4.25 million equity investment into the project. The guarantees will have a term of up to 10 years, providing coverage against the risks of transfer restriction, expropriation, and war and civil disturbance.
Africa Juice TSC is a producer and exporter of tropical fruit juices. The project involves the privatization, rehabilitation, and expansion of an existing farm to deliver a 600 hectare plantation of yellow passion fruit, an additional 600 hectares of other tropical fruits such as mango and papaya, and the construction of a new fruit processing facility.
In addition, Africa Juice TSC will develop and support over 1,200 hectares of outgrowers, organized as cooperatives to supplement the supply to the processing facility and extend community participation.
This project is category B under MIGA’s environmental review procedures, as it has potentially limited adverse social or environmental impacts. Key issues include community and workers health and safety; natural resources management and pollution mitigation; however they are, largely reversible and readily addressed through mitigation measures.
The project is expected to have a positive impact on the country’s economy by expanding Ethiopia’s agricultural and industrial potential, creating jobs for the local population (over 900 in five years), generating tax revenues for the government, and local procurement of goods and services.
MIGA’s proposed guarantee for this investment is consistent with the first pillar of the World Bank Group’s Country Assistance Strategy for Ethiopia for 2008-2011 which focuses on fostering economic growth in order to sustain the emerging economic ‘take-off’. MIGA’s participation in the project is aligned with key agency priorities, which include encouraging investment in sub-Saharan Africa and IDA-eligible (the world’s poorest) countries.
The proposed project would be underwritten through MIGA’s Small Investment Program.