Agrolito Tunisie, SARL

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This summary covers an investment by Fons Mediterrània Capital, F.C.R. de Régimen Simplificado of Spain (FMC) in Agrolito Tunisie, SARL (Agrolito) in Tunisia. The investor has applied for a MIGA guarantee of €2.83 million ($3.74 million equivalent) for a period of up to five years against the risks of transfer restriction, expropriation, and war and civil disturbance. The project involves coverage of Agrolito, an existing portfolio company of FMC, a Spanish private equity fund. The company specializes in the production of winter season lettuce for customers in the “fresh-cut” industry in Europe. Agrolito's main product is iceberg lettuce, but it cultivates other varieties such as butterhead, romaine, batavia, and young leaves such as spinach and arugula. The lettuce is grown in a 400 hectare farm in Enfidha, about 100 kilometers from Tunis. Environmental Categorization This investment is a Category B project under MIGA's Policy on Social and Environmental Sustainability as it has potentially limited adverse social or environmental impacts. Agrolito is located on 300 hectares of existing arable land in Enfida, Tunisia where operations started in 2004. The farm produces iceberg and soft leaf lettuces using drip and sprinkler irrigation systems with water supplied by boreholes. Fertilizers and chemicals are applied through the irrigation system. Key potential impacts include communities and workers' health and safety, natural resources management, and pollution mitigation. The potential impacts are largely reversible and readily addressed through mitigation measures. The company has provided MIGA with a social and environmental impact assessment in line with MIGA's Performance Standards. Development Impact Agrolito has had a positive impact on the local economy of Enfida since 2004. The main impacts expected of FMC's involvement in the project are greater employment generation and knowledge transfer. FMC has introduced new social responsibility, corporate governance, and management best practices into the company, which should have a positive demonstration effect on other enterprises in Enfida. MIGA's proposed support to this project is consistent with the first pillar of the World Bank Group's Country Partnership Strategy (CPS) for Tunisia, which focuses on employment, growth, and competitiveness. In addition, the CPS calls for greater integration of the country's agricultural products into the global economy, and as Agrolito's lettuce and other salad greens are destined for Europe, the project addresses this priority. In addition, the project is consistent with MIGA's efforts to mobilize $1 billion in insurance capacity to support foreign direct investment into the Middle East and North Africa.

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