IFC Board Approves Management Action Plan in Response to CAO Investigation Related to IFC’s Investment in Axzon in Ukraine

Washington, October 17, 2025 — The Board of Directors of the International Finance Corporation (IFC) has approved a Management Action Plan (MAP) in response to the findings of an investigation by their independent accountability mechanism, the Compliance Advisor Ombudsman (CAO), into IFC’s investment in Axzon, an agricultural and livestock company operating in Ukraine.

In 2013, IFC invested in Axzon to support the expansion of its pig production capacity in Ukraine, aiming to enhance food security and promote renewable energy through biogas production. The investment included a long-term loan and equity participation, with Axzon’s Ukrainian subsidiary operating multiple pig farms, a biogas plant, and significant farmland. IFC’s involvement lasted until 2021, when it fully exited the investment.

In February 2014, residents living near three Axzon farms in western Ukraine submitted a complaint to CAO with the support of the National Ecological Centre of Ukraine (NECU). The complaint alleged noncompliance with IFC Performance Standards, citing concerns about odor, land and water pollution from manure management, improper land use and compensation, lack of information disclosure and consultation, impacts on road infrastructure, and environmental effects on natural parks and adjacent areas. CAO’s investigation focused on IFC’s pre-investment due diligence and project supervision, assessing compliance with the 2012 Sustainability Framework and IFC’s Environmental and Social Review Procedures.

CAO’s investigation found that IFC’s pre-investment environmental and social (E&S) due diligence was not commensurate with the project’s risks and impacts. CAO also concluded that IFC’s supervision of this project was lacking, particularly in oversight of the client’s management of manure, wastewater, and potential air, water, and soil pollution. While CAO acknowledged improvements in supervision, CAO concluded that IFC did not assure itself that the client’s management practices met the Performance Standards and good international industry practice, particularly during the first five years of the investment, resulting in potential harm to community members.

IFC takes the grievances put forward and CAO’s findings seriously and has sought to work with its former client to address the issues raised. IFC created a Management Action Plan (MAP) to address CAO’s two recommendations. At the project level, IFC offered advisory services, which Axzon declined, citing progress since IFC’s investment and systems currently in place. In response to CAO’s systemic-level recommendation, IFC has updated its Environmental and Social Review staff guidance, enhancing due diligence and supervision protocols for corporate loan investments.

The MAP, investigation report, and Management Response are available here:

Case Webpage

CAO’s Investigation Report (English | Ukrainian)

Management Response and Management Action Plan (English | Ukrainian)

About CAO

The Compliance Advisor Ombudsman (CAO) is the independent accountability mechanism of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group. CAO's mandate is to address complaints from people affected by IFC and MIGA projects in a manner that is fair, objective, and constructive, improve environmental and social outcomes, and foster accountability and learning to reduce the risk of harm to people and the environment. For more information, visit www.cao-ombudsman.org.