Aqua Corporación de Honduras S.A. ("Aqua Honduras")

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Project Number: 
Expected Consideration Date by the Board: 
Date Posted: 
Invalar Group (Albir Family)
Financing Requested: 
Aquaculture and Fisheries
Rio Lindo
Scope Objective: 
The purpose of Aqua Honduras' expansion project is to increase the annual output of tilapia from 5,750 MT to 9,000 MT by around 2006. This requires building new fish ponds and increasing the processing and packaging capacity, as well as additional working capital. The project also envisages the construction of a new waste treatment plant that will enable the company to process solid fish scraps. Partial refinancing of the company's debt is also included, in order to release essential assets that will be required by the IIC as part of the security package.

The fish farms currently cover a 16-hectare area and include ponds of different sizes, intended for various purposes (for example, hatcheries, reproduction ponds, grow-out ponds), in an intensive and fully-controlled tilapia farming process. The proposed project involves 60 additional hectares for 58 new ponds, a 5-hectare water reservoir and additional storage space for feed and other materials.

IIC's participation has been crucial because we have assisted the company in structuring the project investments and the financial plan. Other investments that the company was considering were incorporated into an integral investment program like the one being proposed. The project includes the construction of a solid waste treatment plant to process fish scraps. This will have a positive environmental impact and will also be an example and a model for other fish farms to follow. At the company's request, IIC has invited another financial institution to participate in the project financing.

By taking part in the project, IIC will support the Honduran tilapia export industry, because the company is the country's largest tilapia farming business. Moreover, Aqua Honduras is promoting and leading a market alliance (and a joint venture in some cases) with other tilapia farming businesses in Latin American countries such as El Salvador, Belize, Peru, and Panama. Tilapia farming is growing steadily and has considerable potential.

Environmental Review: 
This is a category III project according to the IIC's environmental and review procedure because specific impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, and design criteria. The project analysis included the assessment of the technical and environmental information provided by the sponsor, as well as an on-site appraisal mission. The assessment of the potential environmental, social, health and labor impact of the project includes the following:
Resource consumption, water use, treatment of wastewater generated by the production and processing activities, treatment and disposal of solid waste, food safety, workplace health and safety issues, and labor issues.

Main environmental issues
1. Resource consumption. Water use and sources.
The farm is supplied, by gravity, from an open channel that carries the flow released by the state-owned Rio Lindo hydroelectric plant, located barely 800 meters from the farm's main water intake.
The hydroelectric plant is part of the Cañaveral-Rio Lindo generation complex fed by waters from the Yojoa Lake, located some 600 meters above sea level. This complex generates electric energy in two hydroelectric plants: Cañaveral, located some 300 meters above sea level, and Rio Lindo, 80 meters above sea level. The lake water is carried in pipes more than 2 meters in diameter, capable of carrying up to 24 cubic meters per second.
The farm takes up to 15 cubic meters per second from the channel in order to feed the existing ponds.
In addition, the property has another intake of water from Rio Lindo, which runs parallel to the farm boundaries. Any overflow from the Rio Lindo hydroelectric plant that is not used by Aqua Corporación de Honduras is returned to the river. This additional intake, which is entirely gravity-fed thanks to the topography of the area, supplies the property with water in those rare occasions when the hydroelectric plant reduces its flow following a decrease in electrical demand or during regular maintenance work. After being used by the farm, the water is returned to the Rio Lindo.
Aqua Corporación Honduras can obtain up to 6 cubic meters per second from this intake, if required. It has the infrastructure it needs to do so. The processing plant has been supplied by a deep well (62 meters) since it entered service (1998); the well has been evaluated thoroughly. The plant's daily consumption is 20,000 gallons.

2. Liquid Effluents: Liquid waste comes chiefly from the fillet processing plant. It carries a substantial organic load because its main components are fish blood (the fish are usually slaughtered by bleeding them) and water used to wash the floors and the equipment.
There is an effluent treatment system that consists of two oxidation ponds: one of them is anaerobic type and is serially connected to a facultative pond. The liquid effluents discharged into Rio Lindo are regularly analyzed after they pass through the oxidation ponds. The values obtained comply with the technical specifications established by the Honduran Ministry of Health for wastewater disposal in receiving bodies and in the sewage system, and also with the pertinent World Bank recommendations.

3. Solid waste disposal: The farm's organic waste is typically composed of dead fish. The current daily mortality rate is 0.14%, which means some 7,150 dead fish per day. This constitutes a considerable amount of organic waste requiring appropriate disposal. A composting system is currently being implemented. This involves a number of procedures that transform useless or waste organic matter into a product that can be used again - in this case, as fertilizer for ornamental plants.
All organic solid waste from the processing plant, such as fish scraps, heads, entrails, etc., which account for some 60%-70% of each fish's total weight, is brought to a poultry feed processing plant, where it is used to obtain balanced feed, mainly for chickens. Other solid waste is incinerated. Solid waste such as metals from the repairs of equipment and mechanical infrastructure are stored and regularly sent to local metal recycling companies. This is also done with the oil used in the tractors.

4. Cold storage: The company's cold storage units are mainly ammonia-based. Consequently, no chlorofluorocarbons are used.

5. Quality Control / Food Safety: The company is preparing to implement the food quality control system called Hazard Analysis and Critical Control Point (HACCP), which is compulsory for all imports into the U.S.

6. General Health and Safety: The farm and processing plant workers alike are given appropriate protective equipment, as well as health insurance as required by law. Regarding sanitary conditions inside the processing plant, the IICwill require that waste bins be installed in all restrooms, because some restrooms were observed as not having appropriate waste containers.

7. Labor issues: The company respects the minimum working age of 18. The workers of the existing plant and farm do not belong to any trade union, but they are entirely free to do so if they wish.

8. Monitoring: Aqua Corporación Honduras must prepare an Environmental Management Plan (EMP) and an environmental project execution schedule, as well as a monitoring and reporting program to ensure that the new infrastructure complies with national laws and IIC's environmental guidelines. The EMP will state the name of the person responsible for supervising the implementation of all environmental measures. The sponsors will provide a yearly report with supervision data on health and safety issues, accident reports, wastewater discharge, solid waste disposal, hygiene and quality control, food safety, and labor issues.