The International Finance Corporation (IFC), a member of the World Bank Group, has announced an investment in Nigeria-based Indorama Eleme Fertiliser Company to support the expansion of the country's largest fertiliser production facility.
The total IFC financing package to Eleme, according to a release from the corporation, amounts to $375 million. However, the total project cost is $1.2 billion, of which $800 million will be financed by lenders.
The investment is to contribute to improved farm yields and agricultural productivity, which are critical to Nigeria's long-term food security. The move also supports South-South investment into Africa, as the Eleme's parent company is Indorama, a long-time IFC client based in Indonesia.
IFC on Tuesday signed a loan for $150 million, and mobilised another $75 million through a syndicated B loan with the Bank of India. The IFC financing also mobilised an additional $150 million in parallel loans from other development finance institutions - the Belgian Investment Company for Developing Countries, the Commonwealth Development Corporation of the UK, Germany's DEG, and FMO of the Netherlands.
Reacting to the development, the Chief Executive Officer of Eleme, Manish Mundra, said, "IFC's support for this project has helped to provide direct financing and mobilise significantly more to commence our fertiliser operations. With a growing population and limited available arable land, fertilisers are increasingly important to improving crop yield and food supply in Nigeria."
Also, IFC Senior Manager for Manufacturing, Agribusiness, and Services, Carsten Mueller, said, "IFC's investment in Indorama Eleme Fertiliser adds value and makes use of existing natural resources, helping Nigeria expand its manufacturing base while improving food security.
"Indorama has a proven execution capacity for large-scale manufacturing operations and with our long relationship and shared commitment to Nigeria's development; we welcome this new partnership to support further expansion in Africa." IFC supported Indorama in its premier investment in Nigeria through Indorama Eleme Petrochemicals Company in 2007.
The project involves the construction and operation of a nitrogenous fertiliser plant at the site of Eleme's existing petrochemicals complex in Port Harcourt, Nigeria. On completion, the facility will produce granulated urea that will be sold domestically and abroad. The project will involve the development of an 84-kilometre pipeline from the gas supplier's facilities.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. The organisation helps developing countries achieve sustainable growth by financing investment, mobilising capital in international financial markets, and providing advisory services to businesses and governments. In FY12, IFC's investments reached an all-time high of more than $20billion.