Project description
On June 5, 2015, MIGA issued guarantees of $21.8 million covering an equity investment by EcoPlanet Bamboo Group, LLC of the United States in EcoPlanet Bamboo in Nicaragua. The coverage is for a period of up to 15 years against the risks of expropriation and war and civil disturbance.
The project consists of the purchase and conversion of degraded land in the El Rama area into commercial bamboo plantations for the sale and export of sustainably grown and harvested bamboo fiber. MIGA first supported this project in 2012. The investor has requested MIGA’s coverage for an additional equity investment to include the purchase and development of approximately 600 hectares, construction of pre-processing and processing facilities, acquisition of machinery and vehicles, and road construction.
Environmental Categorization
The project is a category B under MIGA’s Policy on Environmental and Social Sustainability because the potential social and environmental impacts are limited, few in number, site-specific, largely reversible and readily addressed through mitigation measures. This project is an expansion to an existing bamboo enterprise of some 3,000 hectares. The sponsor is an existing MIGA client who has demonstrated ability in managing environmental and social risks in line with the Performance Standards. It is expected that the same environmental and social management system will be applied to manage the risks of the expansion. The risks are related to potential pollution due to the use of agro chemicals and liquid and solid wastes; risks to biodiversity on the farms; and social issues related to worker and community health and safety in and around the project site, including increased traffic and the use of security guards. Click here to view the Environmental and Social Review Summary prepared for MIGA’s initial support to the project in 2012. Click here to view an environmental impact assessment prepared for the project.
Development Impact
The project is contributing to job creation in an area where there are limited opportunities for stable employment. EcoPlanet Bamboo (EPB) Group currently employs over 300 workers, of which 100 are women, and is expected to expand its workforce to up to 500 people. Nearly 95 percent of current employees are from the area. All employees are paid above Nicaragua’s minimum wage and receive paid vacation, health insurance, extensive training, and additional benefits.
EPB Group has promoted a number of activities benefiting local communities, including improvements to local school, police, and church facilities. Each plantation has a community health clinic for treatment of minor illnesses.
MIGA’s proposed support for this expansion is aligned with the World Bank Group’s Country Partnership Strategy for Nicaragua. Under its second pillar, the strategy aims to support initiatives in the agribusiness sector that help improve the overall sector productivity, lead to job creation, and promote the sustainable development of new export products.
