On September 28, 2012, MIGA issued a guarantee of $9.8 million to Inter MIMS Investment Limited of Mauritius for its shareholder loan to Jafara Group Limited in Libya. The coverage is for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
Jafara is a company involved in the production, bottling, and distribution of drinking water and juice products in Libya. The company is now the fourth largest manufacturer of juices in the Libyan market and has established two Tetra Pak juice lines, a polyethylene terephthalate (PET) mineral water production line, and canned fruit juices/sodas. Inter MIMS is a wholly-owned subsidiary of the MIMS group of Bosnia and Herzegovina. The company’s shareholder loan will support the expansion of Jafara’s production capacity. Planned improvements include the construction of an additional warehouse, the purchase of equipment for glass bottling, and a new air conditioning system for the factory.
The project’s key development impacts include the addition of new permanent jobs (158 staff employed by the project in total), taxes paid to the government after the expiration of the tax holiday, and significant local sourcing. Inputs sourced in the local market include sugar, pre-forms, caps, cartons, stretch folio, pallets, and glue. The company estimates that it spends €6.5 million yearly in the purchase of local goods and services. In addition, Jafara provides free water and juice to local hospitals and schools.
This project will also have an important catalyzing effect for foreign direct investment into Libya. Investment into the country dropped dramatically as the 2011 civil war unfolded and is only now at the very early stages of recovery. MIGA’s guarantee will help signal that Libya is a viable investment destination, despite the ongoing challenges the country is facing.
In this regard, the project is consistent with MIGA’s strategic priorities of supporting investment into conflict-affected countries and South-South investments, as well as the Agency’s commitment to the Middle East and North Africa given recent events in the region.
The project was underwritten through MIGA’s Small Investment Program.