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
- Bio ZMZM for Plastic Industries
- Project ID
- Fiscal year
- Guarantee holder
Dutch Printing Innovation BV
ZMZM for plastic industries of the West Bank
- Investor country
West Bank and Gaza
- Host country
West Bank and Gaza
- Environmental category
- Date SPG disclosed
- March 13, 2013
- Project Board date
- April 23, 2013
- Gross exposure
- $1.8 million
- Project type
- Strategic priority area
- ZmZm Environmental Impact Assessmemt
This summary covers equity investments by Dutch Printing Innovation BV of the Netherlands and ZMZM for plastic industries of the West Bank in Bio ZMZM for Plastic Industries in the West Bank. The investors have applied for guarantees of €1.35 million (approximately $1.8 million) under the MIGA-administered West Bank and Gaza Investment Guarantee Trust Fund for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves the establishment of Bio ZMZM for Plastic Industries (Bio ZMZM), a joint venture in the West Bank owned by Dutch Printing Innovations BV of the Netherlands (30 percent) and ZMZM for plastic industries (ZMZM) of the West Bank (70 percent). The joint venture plans to create a production facility for biodegradable plastics that expands upon ZMZM’s current plastics business. A new production facility to produce biodegradable plastics, including a factory, warehouse, and office, will be established on the premises of ZMZM in Hebron, near its current factory. The production facility will use blown extrusion technology, using a combination of virgin plastic resin/granule, recycled material, and additives. Production will initially focus on agricultural plastic sheets and drawstring garbage bags intended for the local market as well as export to Israel, Turkey, and Jordan.
This project is being supported by the PSI Plus program of the Netherlands Ministry of Foreign Affairs with a grant to cover up to 60 percent of the project cost and an additional amount to cover the MIGA political risk insurance premium for the first three years.
This 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; as well as soil and water pollution related to the use of chemicals during the production process. The potential impacts are largely reversible and readily addressed through mitigation measures. The company has provided a social and environmental impact assessment in line with MIGA’s Performance Standards.
The expansion is expected to create more than 40 new jobs during the first two years. A training program will substantially increase the knowledge level of employees and improve their competitiveness and employability. Technological knowledge on biodegradable plastics will also be shared with local companies and institutes, including Hebron University.
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.