Leap Agri Logistics (Madhubani) Private limited

• Reduction of food loss through the provision of better grain storage infrastructure.
• Job creation through the construction and operation of new modern silos and facilitating market linkages for grain farmers.
• This investment qualifies as climate finance based on substantial expected greenhouse gas reductions thanks to better quality food storage.

India

Customers are low income and people below the poverty line.

India

• Construction jobs are mostly low skilled; operations jobs are skilled and semi-skilled (engineers and mechanics).
• Medium-large scale farmers, well above Indian farmer averages. Farmers monthly income levels are three times higher than national average farmer income in Punjab and two times higher in Haryana.

Global

• Compared with traditional open storage facilities, steel modern agri-silos reduce post-harvest food loss by 6 per cent (c.3,000 megatonnes of wheat saved per silo).
• They also allow five-fold longer storage time and more efficient management of grains stock. This means two silos will cater for the total grain annual consumption of c.1.6 million people (c. 800,000/silo).
• Job creation: (per silo) 70 new jobs during the construction phase (2 yrs); 20 new jobs during operations (4 yrs). Compared with traditional storage, modern agri-silos create less than half of jobs during the construction phase but create similar number of jobs during operations. We believe any negative impact regarding job creation needs to be tolerated due to the efficiencies gained.
• Supports market linkages to existing farmers (30,000 farmers per silo) allowing the farmers to deliver their produce at the point of storage in a more efficient way.

• Wheat is distributed through the Government’s Public Distribution System, and most customers tend to be from the poorest households, with 40 per cent of the customers estimated to be below the poverty line.
• The depth of impact tends to be higher in poorer states such as Bihar because they have a larger proportion of undernourished population.
• The monthly salary of lowest skilled workers is in line with industry standards and two times higher than current minimum wage for unskilled workers in Bihar.
• Farmers save time and costs; the grain handling is faster (8 hrs vs 2 days), and there is zero commission charged vs 1.5% commission from traditional traders.

• Financial additionality: Non-bank financial companies and private sector banks are not currently active, and there may be some implication on capital available as a result of COVID.
• Value additionality: Implementation of an effective environmental and social impact mitigation plan and alignment with international environmental and social standards. Implementation of a business integrity action plan to align Leap’s business integrity governance with our Code of Responsible Investing and international best practice.

4

External Risk

• Inefficiencies in and changes to the Government’s Public Distribution System may reduce the ultimate impact. In addition, India’s upcoming agricultural reforms may eliminate or reduce the Minimum Support Price guarantees paid to farmers, which may reduce the depth of the impact on farmers (Leap India only receives and stores the grain, and payment to farmers is done directly through the Food Corporation of India). We believe these are both indirect risks outside of Leap India’s control and will need to be tolerated.