The International Finance Corporation (IFC) on Friday announced a fresh $1 billion (about N306 billion) debt financing for Indorama Eleme Fertiliser & Chemicals Limited for the construction of a new fertiliser plant in Nigeria.
The IFC, which is a member of the World Bank Group, said in a statement sent to PREMIUM TIMES that the facility would allow the subsidiary of Indorama Corporation expand its capacity of urea fertiliser to more than 2.8 million ton
The statement signed by the spokesperson of the World Bank Group in Nigeria, Olufunke Olufon, said the IFC said would directly lend $100 million and mobilise an additional $850 million of loans from other developmental financial institutions and commercial banks.
She said another $50 million in financing would be available from IFC’s managed co-lending portfolio programme.
Ms Olufon said IFC would be joined by European Investment Bank, YES BANK, CDC Group PLC, African Development Bank, Bank of Baroda and Standard Bank as Joint Mandated Lead Arrangers (lenders).
Other supporting financiers include: Standard Chartered Bank; Bangkok Bank; FMO; DEG; PIDG company, the Emerging Africa Infrastructure Fund; PROPARCO; ICICI Bank Limited; and Citibank.
“The large number of participating banks signals a strong endorsement of the project, Indorama, and the country by the syndicated loan market lending though a blend of IFC A and B Loans and uncovered facilities,” the statement said.
Indorama Africa CEO, Manish Mundra, noted the huge potential by Nigeria to achieve agricultural self-sufficiency and food security.
He said this was evident from the multi-fold increase in domestic fertiliser consumption after the start of Indorama’s first plant, which made Nigeria become a major hub for urea exports.
With Line 2, he said the company hopes to further expand it’s ability to provide competitively priced and high-quality fertiliser to farmers in West Africa and across the globe.
Besides, Mr Mundra said Indorama was looking forward to continue contributing to Nigeria’s economic development through the provision inputs to boost farmers productivity.
IFC Vice President for Middle East and Africa, Sérgio Pimenta, said the corporation aims to support Nigeria’s efforts to strengthen its manufacturing base and improve stability of its financial system through greater foreign exchange earnings from exports.
With Indorama Eleme, he said IFC was also a partner in helping farmers in West Africa increase their food production and incomes.
Group Vice Chairman, Indorama Corporation, Amit Lohia, said the financing package reflects the company’s strong partnership with IFC over a span of almost three decades.
“We are extremely pleased to bring our financial partners to Nigeria on the back of this strong partnership,” he said.
Although reputed to be one of the world’s leading gas producers, sgnificant volumes of natural gas are wasted in Nigeria due to gas flaring.
The World Bank said over the past three years, Nigeria flared an average of 750 million cubic feet per day of associated gas.
Utilisation of gas for downstream chemical industries such as fertiliser could help find better use for the commodity and reduce gas flaring, a contributor to greenhouse gas emissions associated with climate change.
Indorama Corporation is one of Asia’s leading chemical holding companies with subsidiaries and affiliates in Asia, Africa, CIS and the Middle East manufacturing Polyethylene, Polypropylene, Polyesters, Fertilisers, Textiles and Synthetic Disposable Gloves.