Luna Export Slaughterhouse PLC

pending

The proposed IFC investment is a $5M loan package to support Luna’s US$9.8 million expansion into backward integration into a small ruminant (goats & sheep) feedlot and fodder production operation in southern Ethiopia, including capital expenditures (CAPEX) for: (i) irrigation equipment; (ii) field machinery; (iii) crop storage, (iv) feed crop farm infrastructure, (v) cropping costs, and (vi) the feedlot. The semi-intensive feedlot (c. 300ha for corn silage and Calliandra species) is in Enchete Kebele, Bene Tsemay District/Woreda, South Omo Zone. The project area is located in the arid Weyto valley inhabited by agropastoralists communities. The project site is accessible through a 7 km all weather gravel road from Weyto (Berhale) town (https://maps.app.goo.gl/s83x3HzsBgSKzkf49).  The proceeds also include working capital to purchase and carry animals from local farmers around four Districts for conditioning before slaughtering, through an out-grower scheme (the Project). Luna will provide extension services on fodder production and animal husbandry to outgrowers. Through the lead farmer, training in husbandry management, feed, and breading management will be delivered to farmers. Farmers will get access to improved veterinary services and, where necessary, to better water availability, and will be trained and advised on the production and use of improved animal feed.  The project will occupy a total of 500 ha, previously used for animal grazing, covered by modified habitat without significant biodiversity values, and with no known historical and/or cultural heritage sites. This was validated through satellite imagery and Integrated Biodiversity Assessment Tool (IBAT) and confirmed by an Environmental Impact Assessment (ESIA) conducted in April 2022. The target feedlot capacity is expected to be 24,000 head, operating on a 45-day feed program. At 85% capacity utilization, this would provide an annual throughput of approximately 120,000 head.  Established in 2000, Luna Export Slaughterhouse PLC https://lunafarmexport.com (“Luna” or the “Company”), is one of the leading meat exporters in Ethiopia, exporting chilled goat and sheep carcasses via air freight to the Middle East (United Arab Emirates (UAE) and Saudi Arabia). The slaughterhouse, situated in Modjo, Ethiopia ~74 km southeast of Addis Ababa, also processes goat, sheep, and cattle for the local market. Other Luna operations include (i) Tute farm in Koka, a 200ha animal feed crop and horticulture farm; and (ii) Pomegold farm in Mekelle, a 100ha horticulture farm; produce from this farming operation is exported to the UK; and is sold along with meat in ~ 14 retail outlets (Fresh Corner) in Addis Ababa.