Thursday, April 24, 2014

African Bank approves $100mn loan for Nigeria to boost fertilizer production

Published:

Another loan to help meet MDG goals

The African Development Bank, AFDB, has approved a $100 million (15 billion) loan to Nigeria to boost the country’s fertiliser production capacity, a statement by the bank Thursday  has said.

The loan is expected to assist Indorama Eleme Fertilizer & Chemicals Limited, IEFCL, to build and operate a gas-to-urea fertilizer plant which will be located in Port Harcourt, Rivers State.

The fertiliser company is jointly owned by Nigeria and the Indorama group which has majority stake in the firm after it was privatised by the Federal Government.

The loan is coming barely 72 hours after the bank approved about $700 million (N105 billion) sovereign-guaranteed multi-tranche lines of credits, LoCs, for the Nigerian Export-Import Bank, NEXIM, and the Bank of Industry, BOI, to support export-oriented small and medium enterprises, SMEs.

When completed, the new fertilizer plant would serve the local market as well as those in Benin Republic, Brazil, Ghana, India, South Africa, the United Kingdom and the United States of America.

The project is expected to allow Nigeria, which currently relies on imported fertilizer to meet 80 per cent of its needs, to progressively become self-sufficient and become a major exporter of the commodity.

The establishment of the facility is seen as a strategic catalyst to support job creation in the fertilizer industry, and the need to strive towards achieving the Millennium Development Goals, MDGs in the areas of agricultural development, food sufficiency and a cleaner environment.

The project is expected to create 3,854 jobs, of which 250 are direct and 348 indirect local positions during construction and operation, apart from prospects of revenue generation for the government and the host communities.

The IEFCL plant, located in the existing Eleme industrial complex, would produce urea to be sold in export and domestic markets.

Other components of the projects include an 84-kilometre pipeline and 16-kilometre multi-purpose jetty and terminal infrastructure at Onne Port linking the project site.

The complex is expected to be among the most competitive production sites given the low feedstock price and economies of scale.

With the project, the AFDB will also promote small and medium enterprise linkages through the distribution supply chain for the domestic market.

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