The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, has announced a new $1 billion debt financing for Indorama Eleme Fertilizer & Chemicals Limited, Nigeria.

The fund is provided to help the company in the construction of a new fertilizer line that will expand its capacity of urea fertilizer to more than 2.8 million tons.

A statement issued by the World Bank on the financing support, indicated that the IFC will directly lend $100 million and mobilize an additional $850 million of loans from other developmental financial institutions and commercial banks.

The bank stated also that another $50 million in financing will be available from IFC’s Managed Co-Lending Portfolio Program while European Investment Bank, YES BANK, CDC Group PLC, African Development Bank, Bank of Baroda and Standard Bank will be joining IFC as Joint Mandated Lead Arrangers.

In addition, also supporting the financing are, 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.

Speaking on the funding assistance, Indorama Africa’s Chief executive Officer, Manish Mundra, said: “Nigeria has enormous potential to achieve agricultural self-sufficiency and food security which is evident from the multi-fold increase in domestic fertilizer consumption after the start of Indorama’s first plant. Nigeria has also become a major hub for urea exports.

“With Line 2, we aim to further expand our ability to provide competitively priced and high-quality fertilizer to farmers in West Africa and across the globe. Indorama is looking forward to continue contributing to Nigeria’s economic development”, Mundra enthused.

Commenting, IFC Vice President for Middle East and Africa, Sérgio Pimenta, explained that “IFC 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, IFC is also a partner in helping farmers in West Africa increase their food production and incomes.”

The Group Vice Chairman, Indorama Corporation, Amit Lohia, said: “This financing reflects our 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.”

It is expected that the financing would assist the company to complete this project and by so doing help in mitigating Nigeria’s gas flare rate and improve the utilization of gas for downstream chemical industries such as fertilizer helps reduce gas flaring, a contributor to greenhouse gas emissions associated with climate change.

The World Bank data showed that over the past three years, Nigeria flared an average of 750 million cubic feet per day of associated gas.