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Projects

Project Brief

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
Bon View Trading 92 (Proprietary) Limited
Project ID
7867
Fiscal year
2011
Status
Active
Guarantee holder
MKV Holdings LLC
Investor country
Mauritius
Host country
South Africa
Environmental category
B
Sector
Agribusiness
Date SPG disclosed
March 01, 2010
Project Board date
March 26, 2011
Gross exposure
 $10.0 million
Project type
Non-SIP

View Summary of Proposed Guarantee


Project Description

On May 27, 2011, MIGA issued guarantees totaling $10 million covering an equity investment and shareholder loan from MKV Holdings, LLC of Mauritius to Bon View Trading 92 (Proprietary) Limited in South Africa. Bon View intends to engage in the manufacturing and export of wine and related products through the acquisition of the assets of an existing winery. The coverage is for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project involves an investment in MKV’s wholly owned subsidiary, Bon View, for the purposes of acquiring the assets of the Mulderbosch winery which consists of inventory, winemaking equipment, brand, and the Kanu winery building and farms located in Stellenbosch, Western Cape. The sponsors intend to invest in wine-making equipment to upgrade the existing winery and employ more rigorous viticulture.

The Stellenbosch region’s main economic sectors comprise agriculture (vineyards and soft fruit), tourism, and the services industry. Despite continuing economic growth, there remains a great deal of unemployment, especially within the lower income groups in the Stellenbosch/Somerset West region. The project will have a significant socioeconomic benefit to the area through the creation of temporary jobs during the construction phase and permanent jobs in the operational phase. Staff will receive specialized training to build on their existing skills. The project will generate rates and taxes for the Stellenbosch Municipality, and will contribute to increased tourism in the area.

MIGA’s support for the project is aligned with the World Bank Group’s Country Partnership Strategy for South Africa which calls for the use of MIGA instruments to support small and medium-scale enterprises and increase foreign direct investment. The project was underwritten through MIGA’s Small Investment Program.

 
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