British International Investment

Leap Agri Logistics (Madhubani) Private limited

South AsiaFood & Agriculture

Leap is one of the leading agricultural warehousing and logistics companies in India. It has a twofold mission: to connect the grain supply chain from farm to business, and to transform itself into a robust agri-silos and logistics platform.

This investment was made when British International Investment was named CDC Group.

Our investment

Description of the investment.

Our investment will be used to build and operate new modern consumption agri-silos in India, which will help reduce food loss (c. 3,000 megatonnes of additional wheat saved per silo). Food loss leads to both food security issues, as well as having a high carbon footprint.

Additionally, each silo will support the distribution of subsidised grain for 800,000 people from low-income households, and provide more efficient supply-chain linkages for approximately 30,000 farmers.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Improving food security (SDG 2).
  • Creating rural economic opportunities (SDG 8).
  • Addressing climate change (SGD 13).

How?

How?
  • 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.

Who?

Stakeholder Geography Characteristics
Customers

India

Customers are low income and people below the poverty line.

Employees and farmers

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.
Planet

Global

How much?

Scale Depth/Duration
  • 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.

Contribution/additionality

Contribution/additionality
  • 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.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

4

Risk

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.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4723
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    India
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Food & Agriculture

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Debt
    Start date :
    October 2021
    Amount :
    $6.6m
    Currency of investment :
    INR
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India
    Climate finance type:
    Mitigation

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