Kyoga Ltd.

Project description

This summary covers a loan guarantee from Sucafina Holding of Luxembourg to its project lenders for their investment in Kyoga Ltd. in Uganda. The investor has applied for a MIGA guarantee of $2.5 million for a period of up to seven years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project involves the operation of a coffee processing facility in Uganda. The company has warehouses and processing facilities in Kampala and coffee collection centers in all major coffee-producing regions of Uganda. The proposed guarantees are covering the financing for the construction of three additional warehouses. MIGA has been supporting the company since 1999.

Environmental Categorization

The project is a category B under MIGA’s Policy on Environmental and Social Sustainability because the impacts are site-specific, limited in number, and mitigation measures are readily identifiable. In addition to worker health and safety issues, the key environmental issues are air and noise emissions and solid waste disposal.  The project has a number of policies and procedures in place, which it will update and consolidate into an environmental and social management system. These include procedures for the adequate management of solid waste, employee protection from occupational health hazards, management of surface water runoff to avoid contamination and flooding, monitoring and recordkeeping, and meeting legal requirements of the National Environmental Statute. The project is located in an industrial area and there are no indications of social impacts to the immediate communities; however a traffic management plan will be developed. An independent verification process for ensuring that harmful child and forced labor are not present in the supply chain as part of the proposed 4C certification process will be implemented.

Click here to view the Environmental and Social Action Plan.

Development Impact

The project is expected to continue to strengthen the competitiveness of Uganda’s coffee sector, support economic livelihoods in the Ugandan coffee supply chain—particularly among small farmers—and provide permanent job opportunities, including for women who make up 30 percent of new staff. In addition, the company provides training to its employees as well as the community and procures goods and services that contribute to local economic dynamism.   

MIGA’s proposed support for the investment is aligned with the agency’s strategy of supporting investments into countries eligible for concessional financing from the International Development Association.

MIGA’s proposed additional coverage would be underwritten through MIGA’s Small Investment Program.