CHO Tunisia II

active

 The proposed investment is a senior secured financing package comprising an A Loan of up to €10 million (the IFC loan) and a mobilized loan of up to €10m (together the loans), to CHO Company Ltd (CHO or the Company), a leading olive oil producer, bottler, and exporter based in Tunisia.  Within Tunisia, CHO both (i) grows its own olive trees (on 3,000 ha of farmland of which 100% is certified to a variety of recognized standards including those focused on organic production) and processes these olives into various products (making up about 20% of its business) and (ii) buys 80% of the olive oils it ultimately sells from third party mills so as to produce a total of 40,000 tons of products per year. The company activities include growing and harvesting olives, milling to produce oil, laboratory testing of oils to ensure quality, then storage, conditioning, packaging and sales of that oil along with refining other oil to produce olein, soaps and cosmetics. By-products, such as residues from pomace oil and olive cakes, are created and used as biomass to produce energy or are returned to the fields as organic fertilizers. Activities outside of Tunisia are conducted by subsidiaries and are limited to administrative functions, such as facilitation of imports of CHO’s products, sales, marketing and distribution activities. Those activities were not reviewed as part of this virtual appraisal. Such office workers are managed locally and are subject to applicable country’s labor laws and regulations where these offices are located. They have received CHO policies and Code of Conduct to align their performance with the Group’s objectives and expectations.  CHO is an existing IFC client (CHO Tunisia, #36202); details of the results of the 2015 E&S due diligence can be found at https://disclosures.ifc.org/#/projectDetail/ESRS/36202. That project, now in supervision in IFC’s portfolio, has successfully completed all ten items in the Environmental and Social Action Plan (ESAP). This portfolio client is judged to have a satisfactory E&S performance. In parallel of IFC’s proposed investment, IFC Advisory Services is designing a program to enhance CHO supply chain. Discussion are underway regarding work around climate-smart agricultural practices as well as enhancing the Small and Medium Enterprise (SME) mill’s operations within the CHO value chain. Elements are expected to include water management, food safety and waste or by-product treatment.