Bangladesh : Emergency Working Capital Support to Dairy Value Chain Project
The transaction involves a loan of up to $10,000,000 to Pran Dairy Limited (PDL). The project will help PDL sustain its operations during the COVID-19 crisis, by providing financing for working capital and operational expenditure. It will enable PDL to step up the procurement of milk and other raw materials and thereby build enough buffer inventory to cope with supply chain disruptions. The liquidity support will also help finance longer accounts receivable periods and advances to farmers, increases in operating expenses, and the continuation of timely payments to farmers, employees, and agents.
Project Details
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Project Officer
Mosnier, Zsuzsanna
Private Sector Operations Department
Request for information -
Country/Economy
Bangladesh -
Sector
- Agriculture, natural resources and rural development
| Project Name | Emergency Working Capital Support to Dairy Value Chain Project | |||||
| Project Number | 54236-001 | |||||
| Borrower / Company | Pran Dairy Limited |
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| Country / Economy | Bangladesh |
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| Location | Nation-wide | |||||
| Type or Modality of Assistance |
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| Operational Priorities | OP1: Addressing remaining poverty and reducing inequalities OP2: Accelerating progress in gender equality OP5: Promoting rural development and food security |
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| Sector / Subsector | Agriculture, natural resources and rural development / Livestock |
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| Gender | Effective gender mainstreaming | |||||
| Responsible ADB Department | Private Sector Operations Department | |||||
| Responsible ADB Division | Portfolio Management Division, PSOD | |||||
| Responsible ADB Officer | Mosnier, Zsuzsanna | |||||
| Project Sponsor(s) | ||||||
| Description | The transaction involves a loan of up to $10,000,000 to Pran Dairy Limited (PDL). The project will help PDL sustain its operations during the COVID-19 crisis, by providing financing for working capital and operational expenditure. It will enable PDL to step up the procurement of milk and other raw materials and thereby build enough buffer inventory to cope with supply chain disruptions. The liquidity support will also help finance longer accounts receivable periods and advances to farmers, increases in operating expenses, and the continuation of timely payments to farmers, employees, and agents. |
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| Objectives and Scope | The project will help PDL sustain its operations during the COVID-19 crisis, by providing financing for working capital and operational expenditure. It will enable PDL to step up the procurement of milk and other raw materials and thereby build enough buffer inventory to cope with supply chain disruptions. The liquidity support will also help finance longer accounts receivable periods and advances to farmers, increases in operating expenses, and the continuation of timely payments to farmers, employees, and agents. | |||||
| Status of Development Objectives | The project has started contributing to its development objectives. | |||||
| Status of Operation/Construction | The full loan amount was disbursed in December 2020 and enabled Pran Dairy Limited to sustain its operations amidst increased working capital requirements due to disruptions from Covid-19. | |||||
| Linkage to Country/Regional Strategy | The project is aligned with ADB's Strategy 2030, which calls for ADB to scale up its financing for agribusiness and to promote gender equality in at least 75% of the number of ADB's committed operations by 2030. The project is also aligned with ADB's Operational Plan for Private Sector Operations 2019 to 2024, which calls for growing the share of food brands in the agribusiness portfolio since transactions in the downstream subsector have the lowest level of risks and the potential to drive and structure upstream subsectors, and impact a large number of farmers and consumers. ADB's country partnership strategy for Bangladesh, 2016 to 2020 lists the improvement of rural livelihoods by increasing the productivity of agriculture as a priority investment area for projects because agriculture provides nearly half of all employment and supports more than 70% of the population. The project is consistent with Strategy 2030 operational priority 1 (addressing remaining poverty and reducing inequalities); operational priority 2 (accelerating progress in gender equality); and operational priority 5 (promoting rural development and food security, 2019 to 2024). The project is also part of ADB Comprehensive Response to the COVID-19 Pandemic, which proposed $20 billion to meet the needs of ADB developing member countries as they respond to the crisis. |
| Safeguard Categories | |
|---|---|
| Environment | C |
| Involuntary Resettlement | C |
| Indigenous Peoples | C |
| Summary of Environmental and Social Aspects | |
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| Environmental Aspects | The project is classified as category C for environment in compliance with ADB Safeguard Policy Statement (2009). The project is anticipated to have minimal environmental impact in addition to PDL's existing operation ADB conducted a corporate audit of PDL and reviewed corporate policies, procedures, monitoring reports, and publicly available information. The environmental and social measures and the institutional capacity and commitment of PDL to manage the projects social and environmental impacts are deemed adequate. Based on gaps and improvement opportunities identified, PDL will implement corrective actions. PDL will submit to ADB an environmental and social monitoring report annually. |
| Involuntary Resettlement | The project is classified as category C for involuntary resettlement in compliance with ADB Safeguard Policy Statement (SPS, 2009). ADB funds will not be used to finance construction or facility expansion that may lead to impacts on the involuntary resettlement. |
| Indigenous Peoples | The project is classified as category C for Indigenous Peoples in compliance with ADB Safeguard Policy Statement (SPS, 2009). ADB funds will not be used to finance construction or facility expansion that may lead to impacts on the indigenous peoples. |
| Stakeholder Communication, Participation, and Consultation | PDL engagement with the stakeholders started during the initial environmental examination preparation where local people and other stakeholders were consulted regarding the development of PDL dairy plant. PDL existing corporate management system framework for Environment, Health, Safety and Social (EHSS) provides guidance in company procedures including stakeholder engagement and grievance mechanism. Engagement with the community is presently carried out through the development projects and activities undertaken by the company in its surrounding communities. |
| Timetable for assistance design, processing and implementation | |
|---|---|
| Concept Clearance | 02 Jun 2020 |
| Credit Committee Meeting | 29 Jun 2020 |
| Approval | 15 Jul 2020 |
| Last PDS Update | 20 Feb 2023 |
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 |
|---|---|---|
| Emergency Working Capital Support to Dairy Value Chain Project: FAST Report | Faster Approach to Small Nonsovereign Transactions | Jul 2020 |
| Emergency Working Capital Support to Dairy Value Chain Project: Initial Poverty and Social Analysis | Initial Poverty and Social Analysis | Jun 2020 |
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 |
|---|---|---|
| Emergency Working Capital Support to Dairy Value Chain Project: Environmental and Social Monitoring Report (July 2020-June 2021) | Environmental and Social Monitoring Reports | Jan 2023 |
| Emergency Working Capital Support to Dairy Value Chain Project: Environmental and Social Monitoring Report (July 2021-June 2022) | Environmental and Social Monitoring Reports | Nov 2022 |
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
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