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Bangladesh: PRAN Agribusiness Project

Nonsovereign (Private) Project | 46904-014 Status: Active

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

Project Details

Project Officer
Patil, Avesh Private Sector Operations Department Request for information
Country
  • Bangladesh
Sector
  • Agriculture, natural resources and rural development
 
Project Name PRAN Agribusiness Project
Project Number 46904-014
Borrower/Company Sylvan Agriculture Limited
Country Bangladesh
Location
Type or Modality of Assistance
2883 Loan Ordinary capital resources USD 25.10 million Committed
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
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 Patil, Avesh
Project Sponsor(s)
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.
Status of Development Objectives The Project has been contributing to its development objectives since it started commercial operations in September 2014.
Status of Operation/Construction ADB had approved a loan of up to US$25.1 million for SAL to construct 3 agribusiness facilities (aside from the liquid glucose plant, SAL was also planning to construct a flour mill and a frozen food processing plant). However SAL decided to only pursue the liquid glucose plant and the loan facility was downsized to US$12.15 million. The plant started commercial operations in September 2014.
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 ADBs 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 institutional capacity and commitment of SAL to manage the projects social and environmental impacts are deemed adequate.
Involuntary Resettlement The project will not entail physical or economic displacement, as the land where the manufacturing plant is located is owned by SAL within Habiganj Industrial Park.
Indigenous Peoples The project will not affect any indigenous peoples.
Stakeholder Communication, Participation, and Consultation Consultations have been carried out as part of the IEE study with relevant project stakeholders and this will be continuously undertaken, especially with the local farmers in surrounding communities who will be providing raw materials for the plants. There will be awareness building activities concerning public health and food safety issues with an end goal of improved agricultural practices contributing to improvement in income.
Timetable for assistance design, processing and implementation
Concept Clearance 16 Jan 2012
Credit Committee Meeting 21 Jun 2012
Approval 08 Aug 2012
PDS Creation Date 11 Jul 2012
Last PDS Update 28 Mar 2019

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
প্রাণ এগ্রিবিজনেস প্রকল্প Translated PDS Aug 2012
PRAN Agribusiness Project Summary Poverty Reduction and Social Strategies Jul 2012
PRAN Agribusiness Project Reports and Recommendations of the President Jul 2012

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

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

None currently available.

Related Publications

None currently available.


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