📋 Tender Overview
Website customer/investment
https://gh2group.com/project/gh2-industries/
Region
Asia
Country
Pakistan
Sector
Agribusiness, Food & Water
Publication date
5/1/2024
Effective date
3/28/2025
Total FMO financing
USD 5.00 MLN
Funding
Building Prospects
Environmental & Social Category
(A, B+, B or C)
B+
Who is our customer
GH2 was founded in September 2020 in Lahore, Pakistan, with the purpose of setting up a vertically integrated agri-based manufacturing facility to source (broken) rice and produce rice derivatives for the local and export markets. GH2 is set up by a Pakistani group specialized in developing green energy projects. The project is based near Gharo, Thatta district, in Sindh province.
What is our funding objective
This concerns a greenfield project, or a newly designed project that lacks constraints imposed by previous work. GH2 plans to convert agricultural by-products and local raw materials to value-added products and expand on the export base of the country through a diversified product mix. The project offers a unique integrated and sustainable business model where key inputs including agri feedstock, power and steam are partially or fully produced in-house and various production waste streams are responsibly converted to commercially useful by-products.
Why do we fund this investment
The transaction promotes a circular business model which is important for sustainability. Also, the transactions will benefit Pakistan economically by increasing exports. Additionally, the project will help create jobs, strengthen food production & security, and will improve farmer livelihoods. GH2’s vision aligns with that of FMO in promoting sustainable rice farming in Pakistan with plans to increase farmer resiliency and limit climate impact. The transaction received a 100% Green Label.
What is the Environmental and Social categorization rationale
GH2’s E&S risk category is B+. The main identified environmental and social (E&S) risks are: 1) E&S management system implementation, this will start at construction which has not yet commenced, and 2) E&S and in particular Occupational Health & Safety and labour standards knowledge and capacity of contractors and suppliers. The contractor and supplier risks are increased by the human rights and contextual risks for workers in agriculture and businesses in Pakistan. IFC Performance Standards (PS) 1-4 are applicable: Assessment and Management of E&S Risks and Impacts, Labour and Working Conditions, Resource Efficiency and Pollution Prevention, and Community Health, Safety and Security. The land was procured from a single seller - a private limited company, on a willing seller willing buyer principle. No significant vegetation of economic or biodiversity value was observed on the project land. There is also no evidence of peoples identifying as ‘indigenous’ in or around the project area and no cultural heritage sites are known on or near the site. Based on this, PS 5-8 (Involun
