The African Development Bank has approved $100 million senior loan for Indorama Eleme Fertilizer & Chemicals Limited, a Nigerian company, to support the company’s plans to double its fertilizer production from 1.4 million tons of urea to 2.8 million tons yearly

The continent’s development finance institution’s loan to the fertilizer manufacturing company barely five years after it gave it a loan in 2013 for the commissioning of another urea fertilizer plant.

The completion and exploitation of that plant with a production capacity of 1.4 million tons yearly in 2016 helped turn Nigeria from to exit a net fertilizer importing nations to a self-sufficient producer and net exporter of fertilizer.

For instance, last year the country exported an estimated 700, 000 tons of urea to West Africa and North and South American markets.

It is expected that the latest facility given to the company by the AfDB would be committed to production for export markets as well as address the problem of inadequate fertilizer utilization, which is considered one of the principal constraints to agricultural sector development in the continent.

Commenting on the latest support to the Nigerian company, AfDB’s Director for Industrial and Trade Development, Abdu Mukhtar, projected that the “project will build upon the success of Train-I in increasing the domestic supply of urea fertilizer in Nigeria, making it easily available and leading to cheaper prices for the Nigerian farmer.

“It will also help further address labor issues in a local region wracked by poverty, inequality and political tension by creating high paying technical jobs and will count towards climate change abatement by reducing amounts of flared gas”, Mukhtar added.

Fertilizer production support is well aligned with regional and national priorities of the development finance institution as well as its assistance strategy in Nigeria. It is also an important step towards the Bank’s goal of radically transforming Africa’s agriculture sector and making the continent self-sufficient in food.

According to the bank, the project also supports the medium term economic recovery and growth plan of the Government of Nigeria and the Bank’s regional strategy to link regional markets in West Africa.

For instance, 20% of the urea exports will be made to South Africa and West Africa (Cote D’Ivoire & Senegal). Regional integration will be further strengthened by the export of increased agriculture production in Nigeria.

The Indorama Eleme Complex has been a success story of public private partnerships in Nigeria, with several benefits including, import substitution of raw materials to over 450 downstream industries; increased crop yields of over 30%; and training of 200,000 farmers on the proper use of fertilizers expected to reach 2 million by 2021, amongst others.

Also, the project is expected to create 50,000 jobs, and make an annual contribution of US$2 billion to Nigeria’s GDP. The estimated US$1.1 billion cost of the Project is to be financed with equity of US$100 million and debt finance of US$1billion which will be provided by development finance institutions.

All the financiers have now provided their final Board approvals for the project.