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A loan to support responsible sugar production in Nicaragua
Project
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Signature date
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Location
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Nicaragua
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Financing tool
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Financing amount (Euro)
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15510000
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Financing details
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USD 18.20m loan and EUR 100,000 of emergency technical assistance financing
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Customer
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Nicaragua Sugar Estates Limited S. A.
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Type of customer
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Company
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Project number
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PNI1005
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Environmental and social ranking
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B+
This information is given at the time of signature, without prejudice to any developments in the operation/project.
NSEL is a regional model for sustainable and responsible sugar production. Proparco’s support to NSEL is contributing to the development of high-quality local production and to supporting employment. The project also includes a cogeneration unit to produce clean energy for both the company and the national grid.
Client presentation
Nicaragua Sugar Estates Limited (NSEL, also sometimes known as SER San Antonio) was set up in Nicaragua in 1890 and is the leading sugar player in the country. It produces and distributes sugar and other related products, such as molasses and energy.
Project description
Long-term debt from Proparco to finance investments in sugarcane plantations and the refinery and refinance current short-term debt in order to improve the company's balance sheet, by better matching the maturities of its assets and liabilities.
The allocation of a EUR 100,000 emergency grant in 2020 has financed the equipment and consumables required for the operation of the newly created Covid-19 area in the Alfredo Pellas Hospital managed by SUGANC, through financial support from the company.
Project impact
PROPARCO's support to NSEL is contributing to the development of value chains for high-quality local production.
NSEL has become a regional model for sustainable development in sugar production. It was the first Nicaraguan company to receive the “Bonsucro” label for its refinery, which allows it to produce the quality required to meet the needs of certain clients in agribusiness and the pharmaceutical sector. It also received the Fair Trade label in 2017.
Sugar is one of the main sources of employment in Nicaragua. The project is expected to create or maintain over 4,500 direct or indirect jobs, in particular thanks to NSEL’s partnership with independent producers and small growers.
Finally, NSEL is actively involved in a number of activities which benefit the community. For example, the project includes a cogeneration unit with an installed capacity of 79.3 MW, generating 234 GWh of electricity, only 40% of which is used for self-consumption. 60% of energy production therefore returns to the grid, allowing the community to benefit from it.
The project thereby contributes to the achievement of the Sustainable Development Goals “Decent Work and Economic Growth” and “Responsible Consumption and Production”.