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
- Jafara Co. for Food Production
- Project ID
- Fiscal year
- Guarantee holder
Inter MIMS Investment Limited
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- July 06, 2012
- Project Board date
- July 23, 2012
- Gross exposure
- $10.0 million
- Project type
- Strategic priority area
This summary covers a shareholder loan from Inter MIMS Investment Limited of Mauritius to Jafara Group Limited in Libya. The investor has applied for a MIGA guarantee of up to $10 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
Jafara is a company involved in the production, bottling, and distribution of drinking water and juice products in Libya. The company is now the fourth largest manufacturer of juices in the Libyan market and has established two Tetra Pak juice lines, a polyethylene terephthalate (PET) mineral water production line, and canned fruit juices/sodas. Inter MIMS’ shareholder loan will support the expansion of Jafara’s production capacity. Planned improvements include the construction of an additional warehouse, the purchase of equipment for glass bottling, and a new air conditioning system for the entire factory.
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. Key potential impacts include community and workers’ health and safety and pollution mitigation. The potential impacts are largely reversible and readily addressed through mitigation measures. The company has provided a Social and Environmental Assessment Report in line with MIGA’s Performance Standards.
The project’s key development impacts include the addition of new permanent jobs, (158 staff employed by the project in total), taxes paid to the government after the expiration of the tax holiday, and significant local sourcing. Inputs sourced in the local market include sugar, pre-forms, caps, cartons, stretch folio, pallets, and glue. The company estimates that it spends €6.5 million yearly in the purchase of local goods and services. In addition, Jafara provides free water and juice to local hospitals and schools.
This project will also have an important catalyzing effect for foreign direct investment into Libya. Investment into the country dropped dramatically as the 2011 civil war unfolded and is only now at the very early stages of recovery. MIGA’s guarantee will help signal that Libya is a viable investment destination, despite the ongoing challenges the country is facing.
In this regard, the project is consistent with MIGA’s strategic priority of supporting investment into conflict-affected countries as well as the Agency’s commitment to the Middle East and North Africa given recent events in the region.
The project would be underwritten through MIGA’s Small Investment Program.