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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
Natures’ Produce for Agricultural Investment and Marketing Company (Thimar)
Project ID
10635
Fiscal year
2013
Status
Proposed
Guarantee holder
Natural Produce, Ltd.
Investor country
Malta
Host country
West Bank and Gaza
Environmental category
B
Sector
Agribusiness
Date SPG disclosed
August 03, 2012
Projected Board date
September 21, 2012
Gross exposure
 $2.5 million
Project type
SIP
Strategic priority area
Conflict Affected
IDA

This summary covers an investment by Natural Produce, Ltd. of Malta (NPL) in Natures' Produce for Agricultural Investment and Marketing Company (Thimar) in West Bank and Gaza. The investor has applied for a guarantee of $2.5 million from the MIGA-administered West Bank and Gaza Investment Guarantee Trust Fund for a period of up to 10 years against the risks of expropriation, and war and civil disturbance.

The project involves an equity investment by NPL to develop and expand the operations of Thimar, an existing local agricultural company that plants export quality herbs and vegetables in Jericho, West Bank. The company plans to expand its agricultural land to around 820 leased dunums (205 acres) to increase its production of herbs from 300,000 kilograms to approximately 900,000 kilograms and to produce approximately 3.3 million kilograms of vegetables annually. Thimar also plans to build herb packaging plants as it currently outsources packaging. The planned packing houses will also serve small players in the market and would allow the company to become an aggregator of herb produce in Jericho.

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 herbs and vegetables are produced under glass using advanced irrigation systems and will be packaged in the newly constructed packing houses before distribution. Key potential impacts include community and workers' health and safety; 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

Thimar's expansion will contribute to private sector development and employment generation. The National Development Plan launched by the Palestinian Authority emphasizes supporting economic growth and employment generation led by the private sector. The Interim Strategy of the World Bank for West Bank and Gaza is aligned with these priorities and will support the creation of a favorable business environment to attract private investment, will actively support small and medium enterprises with export potential to spur economic growth, and focus on building a skilled and qualified workforce.

The agricultural sector in the West Bank is underdeveloped and its contribution to GDP growth is declining, despite being the third largest source of employment. This investment will contribute to helping the sector achieve a higher degree of efficiency through the use of advanced irrigation systems. The project will also have an important demonstration effect as it shows the continued achievement of profitability in a challenging environment.

This project is aligned with MIGA's objective of facilitating investments in conflict-affected environments as well as entities eligible for assistance from the International Development Association. The project would be underwritten through MIGA's Small Investment Program.

 
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