Terra AMC

completed

IFC is considering an $18M A Loan to Terra SPRL and African Milling Company Congo SPRL ( together the “Sponsors” or the “Company”), an integrated rain fed maize farm and milling company in Katanga province in the Democratic Republic of Congo (DRC). The funding will be used for increasing the amount of land under cultivation on one of two blocks within a concession (the Lubanda block) from the current 1,500 hectares (ha) to approximately 5,000ha within the next four years, and also to partially provide initial working capital for a maize mill and storage facility.The Sponsors initiated the project in 2006, working with the then chief of the groupement (the leading figure/official regarding land rights in the customary structure in place in DRC). They have continued to work with the current chief of the groupement from 2008 onwards. Obtaining the right to use the land also requires following the legal process as codified in DRC law. This is found in Act No. 75-021 dated of July 20, 1973 related to the general regime of property, real estate regime and regime of safety, as amended and supplemented by Law No. 008 of the July 18, 1980 (land law). The full process of leasing the total 10,000ha concession (consisted of two blocks – Lubanda block, the 5,000ha concession which is currently being developed; and Katofio block, another 5,000ha), including compensating those who were economically displaced (a list of those compensated can be found in Appendix A of the Environmental and Social Impact Assessment (ESIA) developed for this project and disclosed along with this ESRS) is further detailed in the section on PS 5 below. The concession was originally granted for a period of five years; however, upon demonstration of a successful initial operation, the Company was granted 25 years access to areas to be used for farming. The full concession agreements, including Terms and Conditions, are being disclosed along with this ESRS. Section 2.2.9 of the ESIA contains summary details of both concessions. Planting started in 2007; the Company has expanded the area under cultivation to the point where they produced 8,300MT of maize from 907 ha of land in 2012. In 2009, the Sponsors started the construction of a 100,000MT per annum (or approximately 336 ton-per-day) maize mill (called “African Milling Company Congo” or “AMCC”). The mill, designed with the help of Buhler and equipped with that company’s latest milling technology, is almost complete and is expected to be commissioned in July 2014.As part of the concession the Company has the right to develop an additional 5,000ha farm (the Katofio block). Negotiations for this land were initiated in 2008, again with the customary chief of the groupement. It is understood by IFC that developing this farm will require additional capital and so will not be undertaken with the proceeds from this investment.