Eni Biofuel KEN

pending

 Eni S.p.A. (“Eni”) is an Italian multinational and integrated energy company headquartered in Rome, with operations in more than 60 countries. Eni International BV, wholly owned by Eni, is the main holding of several Eni’s indirect subsidiaries outside Italy. Eni Kenya BV (“the Company”) is fully owned by Eni International BV. Eni launched a corporate zero net emissions strategy in 2020, with the target of achieving net zero carbon emissions by 2050. This target will be achieved through a variety of fully decarbonized products, combining environmental and financial sustainability with a strong focus on technological leadership built on years of research and innovation. Within this strategy, Eni started the Agri-Feedstock Program in 2021, integrating agribusiness initiatives within the biofuel value chain to guarantee stable volumes of vegetable oil for the bio-refineries. The resulting products are key to the decarbonisation of the transport sector; with a focus on hard to abate applications such as biofuels for airplanes, ships and trucks. In this unique Program, cultivation of agri-feedstock is entrusted to local farmers and access to market is assured by Eni, for farmers with existing access to land that does not lead to competition with food production. Further, this Program will stimulate socio-economic development in degraded lands and contribute to enhance food security from onward production of animal feed and fertilizers from by-products of vegetable oil processing. As part of the Agri-Feedstock Program, Eni, through Eni Kenya B.V (“the Company”), initiated an Agri-Feedstock Project (“the Project”) in Kenya. The Project involves contractual engagement of third-party aggregators and farmers to supply agri-feedstock, such as cultivated oil seeds and residues from agro-processing and agroforestry to oil extraction and processing plants (“Agri-Hubs”), where these biomasses are processed to produce vegetable oil, destined to Eni bio-refineries in Italy and further refined into different bio-energy products (biofuels). Eni is developing the Agri Feedstock program in several countries, with a target production of 700 hundred thousand tons of vegetable oil in 2026 and significantly more than 1 million tons in 2030. Eni’s program aims at achieving positive impact on more than 700 thousand families of farmers in 2026 and more than 1 million by 2030, contributing to food security with the production of 1 million tons of animal feed and fertilizers in 2026 and much more in the following years.  At the time of appraisal, the Company operated one Agri-Hub in Makueni county and was completing the construction of the second one in Kwale county. The third Agri-Hub is planned to be built at the beginning of 2025. The location for the fourth Agri-hub, with a production capacity of approximately 100,000 MT per year, is being assessed. The Makueni Agri-Hub, commissioned in July 2022, produces 15,000 metric tons (MT) of oil annually. The feedstock processed in the Agri-Hub are non-food oilseed (such as castor) cultivated in degraded land, residues from agro-processing (cotton seeds and residues from nut processing), and other oilseeds, such as croton, from spontaneous trees abundant in Kenya. Considering that the project addresses degraded agricultural areas such as the Arid and Semi-Arid Land (ASAL) in some cases; and prohibits the conversion of food-crop lands for oilseed production, the risk of aggravating food security situation in Kenya is therefore considered low. To support Agri-Feedstock Project in Kenya, IFC intends to invest in (i) a loan of up to US$210 million to be used for its agri-business activities, including to develop up to four Agri-Hubs in Kenya with a total output capacity of 200,000 MT of vegetable oil per year and working capital for feedstock sourcing; and (ii) a risk sharing facility with a commercial bank operating in Kenya on portfolios of eligible loans of up to $60 million equivalent in Kenyan Shillings to farmers and aggregators supplying the Company Agri-Hubs.