EAIF COMMITS ADDITIONAL US$30 MILLION TO SUPPORT INDORAMA’S EXPANSION WITH THIRD UREA PLANT IN NIGERIA
London, 28 March 2024 — The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, has committed a US$30 million senior debt facility to Indorama, a leading producer and exporter of fertiliser. The investment enables the construction of a new plant, port terminal, handling stations, and storage facilities in Nigeria, providing a major boost for the country’s agricultural sector, which is a crucial driver of the country and region’s economic growth.
- The project is expected to position Nigeria as a top 10 global producer and exporter of fertiliser and accelerate the country’s path to industrialisation
- Deepens partnership between EAIF and Indorama, bringing the Fund’s investment to Indorama to $111 million
EAIF acted as a co-lender within a broader debt financing package arranged by the International Finance Corporation (IFC), mobilising US$1.25 billion from a syndicate of impact investors, development finance solutions, and commercial banks. EAIF’s investment increases the Fund’s lending to the company to $111 million, reflecting a joint-ambition to accelerate Indorama’s growth strategy and Nigeria’s aspirations for diversification and industrialisation.
The new funding unlocks fresh capital to enable the construction of a dedicated port terminal and state-of-the-art urea fertiliser plant, anticipating an increase in its current capacity from 2.8 million metric tons to 4.2 million metric tons per annum. The expansion leverages the company’s strategic location as a freight-competitive supplier serving the needs of significant urea markets in the southern Atlantic, including Brazil, Argentina and Uruguay, as well as West Africa, South Africa and the USA.
The facility bolsters Indorama’s capacity, extending its complex beyond the current two urea fertiliser plants, which is well poised to meet the entire demand of the Nigerian market. The third urea plant aims to maximise output to meet the food demands of growing populations as disruptions precipitated by the COVID-19 pandemic and the Russia-Ukraine crisis affect food security around the globe.
Global crop production is reliant on the international supply of fertiliser. The landmark project is expected to position Nigeria, Africa’s largest economy, as a leading producer of urea among the top 10 producers worldwide. Contributing to the UN Sustainable Development Goals 8 and 9 on Decent Work and Economic Growth, and Industry, Innovation, and Infrastructure, EAIF’s loan forms part of the Private Infrastructure Development Group (PIDG) objective for new infrastructure to drive action on climate and nature.
The construction of the port terminal and third plant is set to begin in 2024, with commercial operations expected to commence in 2026. During the construction phase, it is estimated that over 500 jobs will be generated, further contributing to economic development in Nigeria and beyond.
Commenting on the transaction, Olivia Carballo, Managing Director, Emerging Market, Fixed Income at Ninety One, the fund manager of the EAIF, said: “Our continued support for Indorama demonstrates EAIF’s commitment to harnessing the region’s significant economic prospects. Africa’s potential for industrialisation is tremendous, and this landmark project is a testament to Nigeria’s enhanced ability to produce and export competitively priced, high-quality fertiliser to farmers in regional and international markets, which will remain a priority for years to come.”
Munish Jindal, CEO, Indorama, said: “Indorama will utilise state-of-the-art technology and adhere to stringent environmental standards to ensure optimal efficiency, product quality and sustainability. We believe that the establishment of this fertiliser will position Nigeria as a key player in the global agricultural market. We are committed to maximising the potential of this project to benefit farmers, communities, and stakeholders across the value chain.The involvement of esteemed lenders like the Emerging Africa Infrastructure Fund will not only help Nigeria’s in becoming one of the largest exporter of the fertilisers in the region but will also address the issues of global food security. We extend our sincere appreciation to all our partners, lenders, and stakeholders for their unwavering support and dedication to our shared vision.”
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.”