Kabul Dairy Processing Plant

Project description

This summary covers an investment by Van den Heuvel Dairy & Food Equipment B.V. of the Netherlands and two private investors in Kabul Dairy Processing Plant in Afghanistan. The investors have applied for MIGA guarantees totaling €1.35 million ($1.8 million equivalent) for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project consists of the establishment of a dairy processing plant that will process, produce, and distribute high-quality dairy products such as milk and yogurt primarily for the market in Kabul, Afghanistan.

This project is supported by the Agency for International Business and Cooperation of the Netherlands under the Ministry of Foreign Affairs.

Environmental Categorization 

The project is a category B under MIGA’s Policy on Social and Environmental Sustainability as it has potentially limited adverse social or environmental impacts that are largely reversible and readily addressed through mitigation measures. Key social and environmental risks and impacts are related to wastewater, solid waste, energy consumption, food safety and worker health and safety. The client will prepare an Environmental Management Plan to manage the potential risks and impacts consistent with MIGA’s Performance Standards.

Development Impact

Dairy products are a major food source in Afghanistan, but the sector was largely destroyed during the Afghan Civil War of 1992-1996. Since then, imported dairy products have gained a near monopoly in large metropolitan areas such as Kabul. The proposed project will meet the need for locally produced high-quality dairy products—a cheaper and healthier alternative to imported UHT milk. 

The proposed project is expected to employ 20-25 workers.

MIGA’s support for this investment is aligned with the World Bank Group’s Interim Strategy Note for Afghanistan, particularly with regard to providing domestic sources of growth and jobs.

This project is also aligned with MIGA's objective of facilitating investments in conflict-affected environments as well as countries eligible for assistance from the International Development Association. The project would be underwritten through MIGA's Small Investment Program.