Olam Palm Gabon

pending

 The proposed IFC investment is a project finance loan with use of proceeds to support an investment of up to c. US$[350]m (IFC [$US150]m from own account and the remaining amount to be syndicated) to Olam Palm Gabon (“OPG”). The proceeds will be used for (i) the maintenance of the entire palm oil project which includes OPG’s 63,330 ha of developed palm oil plantations (Awala, Makouke, Mouila Lot 1, 2 and 3, and Ndende), three palm oil mills and kernel crushing plants (KCPs) at Awala, Mouila Lot 1 and 3, crude palm oil (CPO) refinery in Lambarene, and all ancillary facilities (e.g. biogas co-generation power plant at the Awala mill, 24,000 ha drip irrigation system at Makouke and Mouila Lot 1, 2 and 3, CPO bulking station at Owendo port, worker’s accommodations, Crop Protection Products (CPP) and fertilizers warehouses, maintenance workshop), (ii) capital expenditure (CAPEX), including the construction of a bio-diesel plant and refinery at Owendo port, construction of a fourth mill at Mouila Lot 2 or 3, including KCP, roll-out of the remaining 20,000 ha of drip irrigation project at Makouke and Mouila plantations, biogas co-generation power plants at three mills, namely Mouila Lot 1, 3 and at the proposed fourth mill, and other maintenance, logistics, and building additions/upgrades) (the “Project”), and (iii) partial repayment of the shareholder loan from the sponsors of up to US$100-150m.   Olam Palm Gabon, a joint venture between Olam Global Holdco Pte. Ltd. (OGH - 60%) and the Republic of Gabon (40%), was established in 2011 to develop and operate palm oil plantations. OPG has developed six plantations, namely Awala (20,030 ha, 6,810 ha planted) located in the Department of Komo Kango, Estuaire Province, Mouila Lot 1 (35,354 ha, 15,885 ha planted), Mouila Lot 2 (31,800 ha, 9,434 ha planted) located in the Departments of Tsmaba-Magotsi and Ndolou, Ngounie Province, Mouila Lot 3 (38,363 ha, 18,284 ha planted) located in the Departments of Douya Onoye and Dola, Ngounie Province, and finally Ndende (58,401 ha, 7,531 ha planted) in Ngounie Province. In June 2016, OPG acquired the Gabonese palm oil assets of “Société d’Investissement pour l’Agriculture Tropicale” (SIAT, a Belgium-based palm/rubber company) located in the Departments of Ogooue et Lac, in Moyen Ogooue Province. These included three concessions (collectively referred to as the Makouke plantation), with a total land area of 18,613 ha, of which Makouke (9,898 ha) and Bindo (3,227 ha) have been under palm oil cultivation since 1981 (with 5,759 ha planted). The third concession Bindo-Bifoun (5,488 ha) has not been developed, aside from 350 ha planted by SIAT in 2016. Other SIAT assets included a 45 metric tons (MT)/hour fresh fruit bunch (FFB) – decommissioned in 2016 - and a CPO refinery of 50 MT/day, commissioned in 1986.  In summary, as of March 2023, OPG has 63,330 ha under palm oil plantation through the operation of nine concessions totaling 202,561 ha (each having land lease agreements and encompassing six plantations, namely Awala, Mouila (3), Makouke, and Ndende) under its direct management control, and out of which, c. 106,000 ha are protected as High Conservation Value (HCV) areas (representing 52% of total OPG concessions – including biotopes such as forest, wetland and savannah). OPG has leased eight of the nine concession areas from the Government of Gabon (GoG) for a period of 49 years, extendable for another 49 years. The ninth concession (Bindo) is held under a private land title. All OPG plantations and mills have been certified against the Round Table on Sustainable Palm Oil (RSPO). In addition, Mouila Lot 3 has been certified against the International Sustainability and Carbon Certification (ISCC). The Ndende plantation is scheduled for ISCC certification by the end of 2023. The Lambarene refinery is ISO 22000 certified since 2020. OPG has self-imposed a moratorium on greenfield development since January 2017. As Olam and the Government of Gabon have a commitment toward zero deforestation, there is no plan for future expansion. This would be IFC’s fifth investment in Olam since 2013. Previous investments are available at: https://disclosures.ifc.org/project-detail/ESRS/31566/olam-corp-loan, https://disclosures.ifc.org/project-detail/ESRS/34841/olam-ii-wc-loan, https://disclosures.ifc.org/project-detail/ESRS/40675/olam-smallholder-crop-financing, and (https://disclosures.ifc.org/project-detail/ESRS/46759/olam-wc-loan. The E&S performance of Olam’s projects in portfolio has been generally satisfactory.