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IFC, partners back Indorama in Nigeria with $1.25 billion for fertiliser export

22 Mar 2024, 11:29 am
Financial Nigeria
IFC, partners back Indorama in Nigeria with $1.25 billion for fertiliser export

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The financing package will fund Indorama's plans to develop a third nitrogenous urea fertiliser production line and a new shipping terminal at its operations in Port Harcourt.

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International Finance Corporation (IFC) today announced a $1.25 billion financing package alongside partners to Indorama Eleme Fertiliser and Chemicals Limited in Nigeria. The investment will allow Indorama to ramp up its fertiliser production and develop a port terminal for exports, supporting food production and food security across regional and international markets, while fostering job creation in Nigeria.

According to a statement by IFC, the financing package will fund Indorama's plans to develop a third nitrogenous urea fertiliser production line and a new shipping terminal at its operations in Port Harcourt. The new production line is expected to have an annual capacity of 1.4 million metric tons of urea, one of the most widely used fertilisers worldwide.

The $1.25 billion financing package includes a $215.5 million loan from IFC's own account; a $94.5 million loan through the Managed Co-Lending Portfolio Program (MCPP); and $940 million financing mobilised from other development finance institutions and commercial banks.

Joining IFC as joint mandated lead arranger and lender is Sumitomo Mitsui Banking Corporation (SMBC), Singapore Branch.

Other lenders contributing to the financing include the African Development Bank, Bangkok Bank, British International Investment, Citibank, Deutsche Investitions- und Entwicklungsgesellschaft (DEG), DZ Bank, Emerging Africa Infrastructure Fund (EAIF), Rand Merchant Bank, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), Export-Import Bank of India (India Exim Bank), Export-Import Bank of Korea (KEXIM), the Standard Bank Group, Standard Chartered Bank, and the United States International Development Finance Corporation (DFC).

As part of the project, Indorama will implement a greenhouse gas (GHG) emissions strategy to reduce emissions at its petrochemical complex by 32 percent by 2026, including by significantly reducing gas flaring and other improvements. This strategy aligns with Nigeria's pledge to eliminate routine gas flaring by 2030 under the World Bank-led Global Gas Flaring Reduction Partnership.

Indorama's two operational urea fertiliser lines serve Nigeria's domestic market, supporting the country's agricultural sector, which accounts for a quarter of country’s GDP and employs about a third of its labour force. The new production line and terminal, which will help meet growing global demand for fertiliser, are expected to create up to 8,000 direct and indirect jobs.

Amit Lohia, Group Vice Chairman, Indorama Corporation, said, "We are grateful to our financial partners for their unwavering support and confidence.  IFC has been a key partner for Indorama in Nigeria for almost two decades.  This financing demonstrates the strong collaboration and alignment of interests between the public and private sector to drive sustainable development and create value for all stakeholders.  Indorama remains dedicated to play a vital role in supporting global food security by ensuring consistent supply of high-quality fertilisers in Africa, and beyond, while contributing to Nigeria's broader economic objectives."

Manish Mundra, Group Director for Africa, Indorama Corporation, said, "The establishment of this fertiliser plant underscores Indorama's unwavering commitment to Nigeria's industrial growth, economic diversification, and leveraging its strategic geographic location. This landmark financing represents a pivotal moment in Nigeria's journey towards becoming a major player in the global fertiliser market. With the addition of this third line, Nigeria is prepared to significantly ramp up its export capacity, thereby enhancing its position as a key exporter of fertilisers to Africa and the world. Furthermore, the establishment of this fertiliser plant will not only address critical issues such as broader food security but will also stimulate agricultural growth and create employment opportunities in Nigeria."

Also commenting on the financing, Sérgio Pimenta, IFC Vice President for Africa, said reliable access to high quality fertiliser is essential for food production and food security around the world. “IFC's investment in Indorama, along with African, Asian, European, and American partners, signals our joint commitment to support the agriculture sector, Nigeria's economy, and the expansion of Indorama, an important supplier in the global food chain."

IFC said the investment in Indorama Eleme Fertiliser and Chemicals Limited is part of its strategy to promote diversified, inclusive growth and job creation in Nigeria, where IFC supports the manufacturing, agribusiness, healthcare, infrastructure, technology, and financial services sectors.

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