Bangladesh: PRAN Agribusiness Project

Nonsovereign Project | 46904-014

Summary

PRAN Agribusiness Project

ADB will support the development of new agribusiness production facilities by PRAN, the largest food and agribusiness group in Bangladesh. As part of its vertical integration and import substitution strategy, PRAN will invest in a liquid glucose plant and a flour mill. The project also includes a frozen food processing plant. Frozen food produced will be mainly flat breads made from flour. Maize and wheat will be procured from local farmers to produce liquid glucose and flour. ADB will provide a $25.1 million loan to the new project company, which will be guaranteed by several existing group companies.

This is ADB's first non-sovereign agribusiness project since 1985. It reflects PSOD's strategy of being more active in sectors with high development impact potential, particularly in Asian Development Fund countries such as Bangladesh

Latest Project Documents

Consulting Notices

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Project Name PRAN Agribusiness Project
Project Number 46904-014
Borrower/Company SYLVAN AGRICULTURE LIMITED
Country Bangladesh
Location Danga and Olipur
Approval Number 7358/2883
Type or Modality of Assistance
7358/2883 Loan USD 25.10 million Committed
Strategic Agendas
Drivers of Change
Sector / Subsector Agriculture, natural resources and rural development - Agro-industry, marketing, and trade
Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Cindy Teo
Project Sponsor(s) Sylvan Agriculture Limited
Description

PRAN Agribusiness Project

ADB will support the development of new agribusiness production facilities by PRAN, the largest food and agribusiness group in Bangladesh. As part of its vertical integration and import substitution strategy, PRAN will invest in a liquid glucose plant and a flour mill. The project also includes a frozen food processing plant. Frozen food produced will be mainly flat breads made from flour. Maize and wheat will be procured from local farmers to produce liquid glucose and flour. ADB will provide a $25.1 million loan to the new project company, which will be guaranteed by several existing group companies.

This is ADB's first non-sovereign agribusiness project since 1985. It reflects PSOD's strategy of being more active in sectors with high development impact potential, particularly in Asian Development Fund countries such as Bangladesh

Objectives and Scope The project will help sustain high agricultural growth by connecting farmers to local and global food markets. The project will help strengthen national food security by improving nutrition with affordable, high-quality food products. PRAN will be one of the first groups in Bangladesh to produce flour fortified with vitamins and minerals. The project will create significant employment opportunities for the poor. The project company will hire about 1,000 workers, at least 30% of which will be women. In addition, some 50,000 farmers will benefit from guaranteed purchase from the project. PRAN has been leading the development of contract farming in Bangladesh, with 42,000 farmers already under contract with the group.
Linkage to Country/Regional Strategy

The project aligns with ADB's agriculture sector strategy. In particular, the Operational Plan for Sustainable Food Security in Asia and the Pacific recommends an expanded partnership with the private sector to attract more direct investments in productivity enhancement, agro-processing, agro-retailing, and other nonfarm rural business. Assistance to an integrated food and agribusiness company also addresses the operational plan's objective of increasing synergy and value addition in the backward and forward linkages along the food and agriculture value chain. Improved linkages along the value chain enhance productivity, employment opportunities, exports, and regional trade, as well as food security for the poor.

Agriculture and natural resources is one of the six sectors identified for ADB assistance under its country partnership strategy for Bangladesh, 2011 2015. In particular, the strategy document mentions that ADB's private sector operations will consider financial support for the food processing industry. The project will benefit from synergies with ADB's sovereign assistance to rural infrastructure and water resource management.

Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

In compliance with ADB's Safeguard Policy Statement (2009), the project is category B for environment, category C for involuntary resettlement, and category C for indigenous peoples. The potential environmental, health, and safety impacts and risks of the project have been identified in the Initial Environmental Examination (IEE), and effective corrective measures to avoid, minimize, or mitigate them are incorporated in the Environmental Management Plan. The project has no involuntary resettlement or impact on indigenous peoples. The institutional capacity and commitment of SAL to manage the project's social and environmental impacts are deemed adequate.

Measures to benefit women and facilitate their involvement in constructing and operating the project have been incorporated into project design in accordance with ADB's Policy on Gender and Development (1998). SAL will comply with ADB's Social Protection Strategy and report regularly to ADB on its compliance, and that of its contractors, with national labor laws and their adherence to internationally recognized core labor standards. Information disclosure and consultations with project stakeholders are consistent with ADB requirements

Involuntary Resettlement The project has no involuntary resettlement or impact on indigenous peoples.
Indigenous Peoples The project has no involuntary resettlement or impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation Consultations have been carried out as part of the IEE study with relevant project stakeholders, especially with the local farmers in surrounding communities who will be providing raw materials for the plants. The participation of beneficiaries will include awareness activities concerning the public health and food safety issues.
Timetable for assistance design, processing and implementation
Concept Clearance 16 Jan 2012
Due Diligence 04 Oct 2012
Credit Committee Meeting 21 Jun 2012
Approval 08 Aug 2012
PDS Creation Date 11 Jul 2012
Last PDS Update 17 Sep 2014
Title Document Type Document Date
প্রাণ এগ্রিবিজনেস প্রকল্প Translated PDS Aug 2012
PRAN Agribusiness Project Reports and Recommendations of the President Jul 2012
PRAN Agribusiness Project Summary Poverty Reduction and Social Strategies Jul 2012

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
PRAN Agribusiness Project: Environmental & Social Monitoring Report (July-December 2013) Environmental and Social Monitoring Reports Dec 2013
PRAN Agribusiness Project: Initial Environmental Examination Initial Environmental Examination Aug 2012

Evaluation Documents

See also: Independent Evaluation

No documents found.


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