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Projects

Summary of proposed guarantee

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. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Fruitful Valley
Project ID
10303
Fiscal year
2012
Status
Not Active
Guarantee holder
UniFruit Ltd.
Investor country
United Kingdom
Host country
Ethiopia
Environmental category
B
Sector
Agribusiness
Date SPG disclosed
December 20, 2011
Project Board date
January 24, 2012
Gross exposure
 $2.8 million
Project type
SIP
Strategic priority area
IDA

This summary covers an investment by UniFruit Limited of the United Kingdom in Fruitful Valley in Ethiopia. The investor has applied for a MIGA guarantee of £1.8 million ($2.8 million equivalent) for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project consists of the establishment of the “Fruit Valley” fruit and vegetable farm by UniFruit Limited (Ethiopia Branch) in Tigray Province. The project plans to cultivate vegetables and fruits such as garlic, onions, pumpkin, strawberries, asparagus, raspberries, boysenberries, and grapes on 1,000 hectares of land leased from the government. The majority of fruits and vegetables will be exported to European and Middle Eastern countries and some will be supplied to local markets.

Environmental Categorization

The project is a category B under MIGA’s Policy on Social and Environmental Sustainability as it has potentially limited adverse social or environmental impacts. The project is located on 1,000 hectares of existing farm land in the Raya Valley. The farm will produce vegetables and fruits using drip irrigation with water supplied by boreholes. Key potential impacts include community and workers’ health and safety; minimal resettlement; natural resources management and pollution mitigation. The potential impacts are largely reversible and readily addressed through mitigation measures. The company has provided MIGA with a social and environmental impact assessment in line with MIGA’s Performance Standards.

Development Impact

The project is expected create about 300 local jobs during phase one and provide public services and amenities to surrounding villages. It will also generate tax revenues for the government and transfer skills and modern agricultural equipment to local farmers.

The project is aligned with the World Bank’s Country Assistance Strategy for Ethiopia which calls for fostering economic growth. By providing jobs and service in rural communities, it will help contribute to the reduction of rural-urban migration. It is also aligned with MIGA’s strategic objective of promoting investment into the world’s poorest countries. The project would be underwritten through MIGA’s Small Investment Program.

 
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