fbpx 54325-001: Olam COVID-19 Smallholder Farmer Livelihood Support Project | Asian Development Bank

Regional: Olam COVID-19 Smallholder Farmer Livelihood Support Project

Nonsovereign (Private) Project | 54325-001 Status: Proposed

The project will help sustain the livelihood of smallholder farmers impacted by COVID-19 in Indonesia, Viet Nam, and PNG by providing working capital financing to Olam International Limited (OIL) and Olam Treasury Private Limited (OTPL) to increase its raw material procurement from these farmers.

Project Details

Project Officer
Jeong, Juhyun Request for information
Country
  • Regional
Sector
  • Agriculture, natural resources and rural development
 
Project Name Olam COVID-19 Smallholder Farmer Livelihood Support Project
Project Number 54325-001
Borrower/Company Olam International Limited
Olam Treasury Private Limited
Country Regional
Indonesia
Papua New Guinea
Viet Nam
Location Indonesia - Nation-wide; Papua New Guinea - Nation-wide; Viet Nam - Nation-wide
Type or Modality of Assistance
Loan Ordinary capital resources USD 93.75 million Approved
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agro-industry, marketing, and trade

Gender Equity and Mainstreaming Effective gender mainstreaming
Responsible ADB Department
Responsible ADB Division
Responsible ADB Officer Jeong, Juhyun
Project Sponsor(s)
Description The project will help sustain the livelihood of smallholder farmers impacted by COVID-19 in Indonesia, Viet Nam, and PNG by providing working capital financing to Olam International Limited (OIL) and Olam Treasury Private Limited (OTPL) to increase its raw material procurement from these farmers.
Objectives and Scope The project will support smallholder farmers that OIL and its subsidiaries (Olam) directly sources from across the project countries. Disruptions to agricultural supply chains caused by the coronavirus disease (COVID-19) pandemic have impacted smallholder farmers as local markets close down and smaller traders cease buying. The COVID-19 impact on livelihoods of female farmers are disproportionately harsh given their limited access to land, credit, and inputs. In this context, Olam role as a sustainable buyer of agricultural products at scale will provide timely support to smallholder farmers livelihoods, in particular for female farmers.
Linkage to Country/Regional Strategy

The project is aligned with ADB Strategy 2030, which calls for ADB to scale up its financing for agribusiness and promote gender equality in at least 75% of the number of ADB committed operations by 2030. The project is also aligned with Operational Plan for Private Sector Operations 2019 to 2024 which calls for working with Tier-1 agribusiness companies because of their potential to have widespread impact including as partners in TA. It is consistent with ADB country partnership strategies for Viet Nam, Indonesia, and PNG.

The project is consistent with the Strategy 2030 Operational Plan for Priority 1 (OP1) by preserving the livelihoods of smallholder farmers during COVID-19, Operational Plan for Priority 2 (OP2) to protect women workers and farmers and Operational Plan for Priority 5 (OP5) which calls for (i) modern, sustainable, and responsible corporate farming models; (ii) the integration of farmers, agribusinesses, and consumers into efficient and sustainable value chains; and (iii) promote food security and increase agricultural productivity to provide sufficient, safe, and affordable food to the poor. As a regional project benefiting three DMCs, the project is consistent with Operational Plan for Priority 7 (OP7) as it supports nonsovereign lending for cross-border operations for agriculture value chains. The project is also part of ADB Comprehensive Response to COVID-19 Pandemic which proposed $20 billion to address the needs of ADB developing member countries as they respond to the COVID-19 pandemic.

Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects ADB has categorized the project in compliance with ADB Safeguard Policy Statement (2009) (SPS) as category C for environment. OIL and OTPL have existing corporate environmental and social management system, composed of various policies, standards, and codes of practices, that were assessed during the due diligence process of the existing loan and found to be compliant with regulatory requirements and international good industry practices. These were strengthened through adoption of ADB Safeguard Policy Statement (SPS, 2009) requirements in the expansion of OIL and OTPL four existing facilities supported by ADB. OIL confirmed through the annual environmental and social monitoring reports submitted to ADB that there are no environmental and social non-compliances and grievances recorded on any of facilities and activities supported by ADB. The environmental and social performance of the existing loan and the institutional capacity of OIL and OTPL to manage environmental and social issues linked to its operations are deemed satisfactory.
Involuntary Resettlement ADB has categorized the project in compliance with ADB Safeguard Policy Statement (2009) (SPS) as category C for involuntary resettlement.
Indigenous Peoples ADB has categorized the project in compliance with ADB Safeguard Policy Statement (2009) (SPS) as category C for Indigenous Peoples.
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 12 Aug 2020
Credit Committee Meeting 01 Oct 2020
Approval 04 Nov 2020
Last PDS Update 09 Nov 2020

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.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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