Project detail - Produmar S.A.

Who is our prospective customer?

Produmar, founded in 1981, is an Ecuadorian company active in shrimp production. The company is part of the Almar Group ("Group"), a front-runner in innovative aquaculture with a more than 40-year track record in Ecuador.

What is our funding objective?

FMO will provide up to USD 30 million in long-term financing (USD 15 million is uncommitted) to Produmar for the acquisition of new shrimp farms, their refurbishment, electrification, and other feed conversion-related projects.

Why do we want to fund this investment?

Aquaculture is a key engine of Ecuador's economy, representing the country's second-biggest export product after oil production and one of the primary sources of employment. By supporting Produmar, FMO will contribute to local-level economic production and an increase in local income in the country once the new farm acquisitions are refurbished and are operating with Almar's investments in technology. Also, the investment contributes to solidifying the Group's efforts towards low greenhouse gas (GHG) emissions, reducing the Group's carbon footprint, and supporting the sector's decarbonization pathway by substituting fossil fuels with green, sustainable energy sources. Lastly, Produmar is committed to sustainable production practices (e.g., ASC certifications) and transitional activities. As a result, Produmar is considered a green customer with a 100% Green label.

What is the Environmental and Social categorization rationale?

This concerns an E&S B+ categorized investment. The company primarily produces Pacific White Shrimp - Litopenaeus Vannamei – through its own operations. Assessment of the Produmar operation indicates the project presents activities that could result in potential adverse environmental and social (E&S) risks and/or impacts that are generally beyond the site boundaries, largely irreversible, and can be addressed through relevant mitigation measures. Key E&S risks related to semi-intensive shrimp production are animal welfare, diseases, working conditions, conflict due to the use of armed security to face the high levels of security risks, and soil and water pollution using fossil fuels as a source of energy in the farms besides the use of electricity generated through hydropower. Monitoring of Produmar's ESG performance will be focused on the assessment and management of these risks by incorporating Good International Industry Practices, including World Bank Group (WBG) Environmental, Health, and Safety Guidelines for Aquaculture, FMO's animal welfare position statement, and International Aquatic Health Code Practices. FMO's E&S due diligence indicates that the investment will have an impact that must be managed in a manner consistent with the following IFC Performance Standards (PS) in particular: PS 1 – Assessment and Management of Environmental and Social Risks and Impacts, PS 2 – Labor and working conditions, PS 3 – Resource Efficiency and Pollution Prevention, PS 4 – Community Health, Safety and Security, and PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources. PS 5 Land Acquisition and Involuntary Resettlement, PS 7 Indigenous Peoples, and PS 8 Cultural Heritage are not applicable in this period, as the land was acquired through a willing-buyer/willing-seller transaction, and there is no impact on Indigenous Peoples, nor cultural heritages have been identified. Nevertheless, as expansion plans are included, mechanisms and requirements defined by all PSs have been considered to ensure the company manages potential impacts if they become applicable in new acquisitions. FMO will periodically review the project's compliance with the Performance Standards.