Friday, April 19, 2024

AfDB loans Indorama $75 million to boost fertiliser production, export capacity

A statement on the AFDB’s website late Thursday said the loan will enable Indorama to increase its fertiliser production and develop a port terminal for exports.

• March 29, 2024
AfDB
AfDB

The African Development Bank (AfDB) has signed a $75 million loan agreement with Nigeria’s Indorama Eleme Fertiliser and Chemicals Limited.

A statement on AFDB’s website late Thursday said the loan will enable Indorama to increase its fertiliser production and develop a port terminal for exports.

The statement also said the loan would support food production and food security across regional and international markets while fostering job creation in Nigeria.

It said that the expansion would include developing a third urea fertiliser production line and a new shipping terminal at Indorama’s facilities in Port Harcourt.

“The new production line is expected to have an annual capacity of 1.4 million metric tonnes of urea, one of the most widely used fertilisers worldwide.

“Indorama’s two operational urea fertiliser lines serve Nigeria’s domestic market.

“It supports the country’s agricultural sector, which accounts for a quarter of its gross domestic product (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, is expected to create up to 8,000 direct and indirect jobs in Nigeria,” the statement said.

The statement also quoted the acting director of Industrial and Trade Development Department of the AfDB, Ousmane Fall, as commending the partnership.

Mr Fall said the bank was proud of its continued partnership with Indorama, the IFC, and other lenders on this critical project.

He said the partnership aligned with the bank’s strategic priorities to feed and industrialise Africa while generating significant development outcomes in Nigeria.

Meanwhile, Manish Mundra, Group Director for Africa at Indorama Corporation, said establishing the fertiliser plant underscored 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 this third line, Nigeria is prepared to significantly ramp up its export capacity, thereby enhancing its position as a key exporter of fertiliser to Africa and the world,” he said.

The AfDB’s loan follows a strategy to support investment in private sector development to promote real sector growth.

The $75 million loan is part of a $1.25 billion facility arranged by IFC.

The financing package includes a $215.5 million loan from IFC’s account, a $94.5 million loan through the Managed Co-Lending Portfolio Programme (MCPP), and $940 million in parallel loans from other development finance institutions and commercial banks.

Some of the banks include the AfDB, Bangkok Bank, British International Investment, Citibank, Deutsche Investitions- und Entwicklungsgesellschaft (DEG), DZ Bank, Emerging Africa Infrastructure Fund (EAIF) and Rand Merchant Bank.

Others are Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), Export-Import Bank of India (India Exim Bank) and Export-Import Bank of Korea (KEXIM).

The Standard Bank Group, Standard Chartered Bank, and the United States International Development Finance Corporation (DFC) are also part of the banks.

(NAN)

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