Agripoint Port Terminal

complete

Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed In September 2010, the EBRD approved a loan of up to 24 million to CHS Inc to acquire the share capital of Agripoint (the Project), to support CHS in its objective of increasing the volume and efficiency of the Project’s operations, and to prepare for expansion of its grain terminal. Project Objectives Acquisition of the Project was anticipated to permit CHS to take over operation of the port, and to increase its efficiency and volume. Transition Impact The primary transition impact anticipated from the project related to the demonstration effects of successful restructure of the Project’s trading activities, and consequent market expansion of the port facility.  This would involve training of the Project’s traders to move beyond back-to-back sales, allowing the Project to share in existing CHS support functions such as risk management, and to improve the Project’s financial success. Additionality The Bank’s contribution to the transaction relates not only to the supply of long-term financing otherwise difficult to encounter in the market, but critical local and regional insights and sector-specific trading expertise.  The Bank was uniquely placed to provide these insights on the basis of its status as the region’s largest investor. Environmental and Social Summary Determined to be a Category B project, the Bank held meetings with CHS management on issues including Environment, Health and Safety, Labour, Human Resources and Corporate Compliance, and confirmed that its practices on these matters satisfy the standards required by the EBRD’s Performance Requirements (PRs), including all operations of its subsidiaries, partnerships, joint ventures and other activities in which CHS exercises management control. The EBRD also imposed a requirement that the Project’s operations and facilities will be subject to environmental and social, and health and safety, due diligence in line with the EBRD’s PRs, including imposition of any recommendations set out in the resultant Environmental and Social Action Plan. Throughout the project term, CHS has been in compliance with relevant EHS recommendations. Technical Cooperation None Implementation Summary EBRD’s financing consisted of a term loan to CHS Inc for the acquisition of Agripoint, the grain trading and storage business of East Point Holdings (EPH) Furthermore, the project aimed to improve and expand Agripoint LLC’s key asset – a grain logistics facility in a Romanian port, as well as overhaul its existing crop trading operations. In 2011, CHS managed to acquire 100% of Agripoint. The anticipated expansion and improvement of the grain facility went as planned, demonstrated by the 30% increase in throughput, and successful implementation of staff training. Furthermore, the company demonstrated successful restructuring of Agripoint’s trading activities. The client remained in full compliance with all environmental, social, health and safety (EHS) standards imposed in relation to the transaction and as agreed with the Bank.