Development Report 2022
Entrepreneurs play an important, active role in society. As part of its environmental and social standards, DEG expects its customers to implement sound community, health and safety management for neighbouring communities. Active interaction with local communities is a win-win situation for all involved: companies encourage local social acceptance and support for their activities, while communities benefit from an increase in amenities and opportunities that would not otherwise exist.
85% of the manufacturing companies and infrastructure projects in DEG’s portfolio have implemented a community, health and safety management in line with DEG’s environmental and social standards. In addition, around 86% of DEG’s portfolio companies engage in community development activities. During the last reporting year, each company made an average amount equivalent to around EUR 1.27 million available for community development. The most common areas for investment were education and healthcare.
Where necessary, DEG advises its customers on how they can organise their community engagement, taking into account the needs of local communities. DEG supports companies by offering promotional programmes in areas such as setting up a comprehensive stakeholder management and in developing projects with surrounding communities that promote sustainable structures on the ground, such as through know-how transfer or the development of small local economic sectors.
For local communities, it is important that residents can contact companies directly and express their concerns. This enables any potential problems to be brought to the attention of the company so that it can take remedial action. A well-structured grievance mechanism is not only a means of communicating with customers to improve services and customer loyalty. It is also an important tool for internal and external stakeholders and shows an institution’s commitment to transparency and ethical business conduct. Implementation of such a grievance mechanism is part of the requirements of the international environmental and social standards to which DEG is committed.
79% of DEG’s portfolio companies have set up a grievance management mechanism.
Name: MK Group d.o.o.
Invested volume (in EUR): 22m
Country: Serbia
DERa category: Community benefits
% achieved of category: 50
A loan of EUR 20 million was already provided to MK Group in 2013, followed by a further financing of EUR 22 million in 2022. MK Group is a Serbian holding company active in agriculture, banking and tourism. It plays an important systemic role in ensuring a reliable supply of staple foods such as sugar, cereals, oil seeds, vegetables, fruit and meat products, thus contributing to food security in the region. The Group is known in the country for its social commitment. Especially during the last five years, it has implemented more than 500 socially responsible actions and invested around EUR 5 million in favour of development of local communities. Among others, it anticipates and supports a number of sports, cultural and social events and helps vulnerable groups with different types of donations.
Name: Al Husainiyah Power Generation Company Ltd.
Invested volume (in EUR): 26.3m
Country: Jordan
DERa category: Community benefits
% achieved of category: 66
Al Husainiyah Power Generation Company (“AHPGC” or the “Company”) is operating a 50 MW photovoltaic project in Ma’an Governorate, Jordan. The company has not only implemented a certified environmental, health and safety system (ISO 14001), but also supported the local community during the construction phase. By interacting in different consultations with local stakeholders, a list of different CSR programmes was developed and is under implementation. The company employed technicians and drivers from local communities and further qualified them to perform maintenance work when the plant became operational. Additionally, the project has implemented CSR activities such as providing equipment for a local bakery run by women or medical supplies to different medical centres, installed waiting sheds and supported many schools. This includes school maintenance, providing air conditioning units and a temporary prefab caravan to be used as a classroom.