In February 2013, FMO contracted a financing transaction with Indorama Eleme Fertilizer & Chemicals Limited (“IEFCL”). IEFCL is to construct and operate Nigeria’s largest fertilizer production facility, located near Port Harcourt in the Niger Delta. Upon completion, the facility will produce 1.4 million tonnes granulated urea per annum that will be sold domestically as well as abroad.
The total project cost is budgeted at USD 1.2 billion, of which USD 800 million will be financed by debt. IFC is the lead arranger for the Development Financial Institutions (“DFI”) tranche, which amounts to USD 375 million. FMO will participate, on a parallel basis, for an amount of USD 30 million.
The project has important positive impacts on economic development, inclusive growth, and climate change. Regarding economic development, the project will contribute to the Government of Nigeria’s strategy of industrial diversification away from the dominant oil and gas industry. It will help develop the domestic agriculture sector by improving farm yields and productivity, critical elements to Nigeria’s long-term food security. Regarding inclusive growth, the project will make substantial contributions towards creating local employment opportunities. In addition, it will generate government revenues and pay dividends to the regional government, host communities, and local employees, each of whom hold indirect ownership stakes in the project. Finally, the project will help reduce gas flaring in the Niger Delta. Gas flaring is one of the biggest contributors, globally, to CO2 emissions
The investment cements the long-term relationship between FMO and IEFCL’s ultimate parent company Indorama Corporation, an FMO client since 1990.
