Rice producer SL Agritech Corp. announced that it had become the first private company in the country to issue a social financing instrument worth 2 billion pesos.
“DNV has made a second-party opinion assuring [the] funds will allow us to raise capital for a project that has “social” benefits. The funds will be drawn in one or more installments over three years,” SL Agritech said in a statement.
The issue is to be managed and arranged by MIB Capital Corp. and has been approved by DNV Business Assurance Pty. ltd.
“SL Agritech currently meets the criteria established in its eligibility assessment protocol [that is] aligned with the stated definition of social bonds and loans,” DNV said in a statement.
“There has been a growing demand for sustainable bonds such as SL Agritech’s social finance instrument,” said Konsintr Puongsophol, financial sector specialist at the Asian Development Bank.
“Global sustainability bonds doubled to $1.5 trillion in 2021 from $745.4 billion in 2020,” he added.
SL Agritech said it is engaged in continuous expansion every two years. Its hybrid rice production and seed processing sites, including expansion sites, are in Talavera, Nueva Ecija; Banay Banay, Davao Oriental; Victoria, Tarlac; and Matanao, Davao del Sur.
“Through our factory expansion program, we are able to help more farmers and provide jobs for those in the agricultural sector. We are contributing to economic growth in the target areas and nearby rural communities,” said SL Agritech Vice President for Rice Operations, Christopher Brian C. Lim.
“Oil and food are very important to us. Right now, during this war with Russia, the price of wheat and food has gone up. There is a good opportunity for farmers to plant and produce more so that we are self-sufficient. In this season, we have to be self-sufficient in food,” he added.
A review and finalization of the terms of the issue will take place from April 18 to 27, while the signing of the financing facility will take place on May 2.
The social finance instrument will be made available to 19 major institutional lenders.
SL Agritech said it had recently established its social finance framework and its social and sustainability committee to oversee socio-economic development projects.
The projects include a contract farming program for rice and hybrid seeds that provides farmers with inputs, tools and technologies in advance. SL Agritech then buys back the harvest from the farmers at the prevailing price plus a premium.
The Hybrid Rice Technology Demonstration Program is a nationwide farmer education that guides farmers on implementing agricultural technology using hybrid seeds from planting to harvest.
The company also pursues research and development of hybrid seed varieties in terms of yield, good taste quality and resistance to pests to ensure a sustainable food system.
It also includes factory expansion programs aimed at creating more jobs for farmers and the agricultural sector, promoting economic growth in rural communities. — Luisa Maria Jacinta C. Jocson