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| Adv Bio-Extracts |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 24994 |
| Company name | Advanced Bio-Extracts Limited |
| Country | Kenya |
| Sector | Chemicals |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Active |
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| Date SPI disclosed | May 16, 2006 |
| Projected board date | June 21, 2006 |
| Previous Events | Invested: March 4, 2008
Signed: January 18, 2007
Approved: June 23, 2006 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Advanced Bio-Extracts Limited (ABE or the company) is the pioneer and leading producer of pure artemisinin in East Africa. The company sources Artemisia annua leaves from three wholly-owned subsidiaries in Kenya, Uganda and Tanzania, is currently operating a satellite extraction plant in Kabale, Uganda and is setting up a plant in Kenya to extract and purify artemisinin from these. It is undertaking an investment program comprised of:
- setting up of manufacturing capacity to extract crude artemisinin initially from 6,000 tons per annum (tpa) of Artemisia annua leaves (the leaf or artemisia), purification of 50 tpa of pure artemisinin and derivatization capacity at Athi River Export Processing Zone, Kenya;
- upgrading of satellite processing facility to extract crude artemisinin from 600 tpa of artemisia in Kabale, Uganda; and
- establishing raw material production equipment in Kenya, Uganda and Tanzania during the next 18 months. |
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| Project sponsor and major shareholders of project company |
| The project is sponsored by seven shareholders (jointly referred to as the sponsors). The principal shareholders are: Mr. Patrick Henfrey; Mr. Geoff Burrell and Mr. Erwin Protzen (combined 69.2% shareholding). The other shareholders jointly own 30.8% |
| Total project cost and amount and nature of IFC's investment |
The total project cost is estimated at $25.0 million, out of which, about $12.4 million would be spent on production facilities and infrastructure at Athi River, Kenya and Kabale, Uganda. Other investments would be towards raw material development, transportation vehicles, pre-operative and research & development expenses and long-term working capital requirements.
IFC’s proposed investment in the company would be in the form of a subordinated C- Loan of up to $3.0 million and an A loan of up to $6.0 million for IFC’s own account |
| Location of project and description of site |
| The key project site is at Athi River Export Processing Zone in Kenya. It is a greenfield site, located within an industrial export processing zone. It is well connected by road to Nairobi, Kenya. A part of the financing would also be used to upgrade the production facilities at the company’s plant at Kabale, Uganda. This is an existing plant, currently under operations |
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| Anticipated development impact of the project |
This project will have a strong development impact in the fight against the increasingly resistant malaria parasite by supporting one of the leading African producers of artemisinin to expand and strengthen its operations. The project will augment the efforts of various donor agencies to facilitate a cost-effective switchover to artemisinin- based combination therapies (ACTs), which have proven effective in treating malaria.
The project will provide employment to over 250 workers directly and support the livelihood of numerous farmers in Kenya, Uganda, and Tanzania. It will also introduce new process technology to the East Africa region and set an example for world-quality extraction and purification of other similar plant-based products in East Africa. |
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| IFC's expected development contribution |
| IFC’s investment will assist in strengthening a natural products extraction company supplying critical active pharmaceutical ingredients (APIs) to the pharmaceutical industry and a company that is uniquely positioned to cater to the growing demand for a vital malaria drug by providing it with long-term financing, that is otherwise unavailable locally. IFC is also expected to play a role in raising parallel equity financing from other investors. |
| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project company.
The following potential environment, health and safety and social impacts of the projects were analyzed:
- land use change;
- pesticides handling and application;
- power and water supply;
-out grower extension services;
- labor standards;
- environmental management;
- hazardous materials management;
- waste disposal; and
- general employee safety and training.
The company has presented an outline and commitments to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements, i.e. the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines.
The Environmental Review Summary (ERS) will be made available at the ABE production facilities in Athi River and Kabale, and the Company’s offices in Nakuru, Kampala, and Usa River and the respective municipal offices of these locations. Availability of the ERS at these locations has been advertised in a national newspaper. |
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| For inquiries about the project, contact: |
Ms. Lisa Amenya, Coordinator
East African Botanicals Limited
P.O. Box 63426-0619
Nairobi, Kenya
Phone: +254 (0)20.2700261
Fax: +254 (0) 20.7125709
E-mail: lisa.amenya@abextracts.com |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennslyvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
E Mail: Webmaster |
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