The African Development Bank has approved $100 million senior loan to Nigerian firm, Indorama Eleme Fertiliser & Chemicals Limited, to support the company’s plans to double its fertiliser production from 1.4 million tons of urea to 2.8 million tons per annum.
The estimated $1.1 billion cost of the Project is to be financed with equity of $100 million and debt finance of $1billion which will be provided by development finance institutions.
AfDB’s intervention follows a previous loan extended to Indorama Fertiliser in 2013 for the commissioning of another urea fertiliser plant with a production capacity of 1.4 million tons per annum.
Indorama Eleme Fertiliser and Chemicals Limited, which now known as Indorama Eleme Fertiliser & Chemicals Limited, was privatised in 2006 after the sale of Federal Government’s 75 percent shares to a core investor through a competitive bidding process.
Abdu Mukhtar, Director for Industrial and Trade Development at the African Development Bank said: “This project will build upon the success of Train-I in increasing the domestic supply of urea fertiliser in Nigeria, making it easily available and leading to cheaper prices for the Nigerian farmer.”
“It will also help further address labour 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.”
The completion and exploitation urea fertiliser plant in 2016 helped turn Nigeria from a net fertiliser importer to a self-sufficient producer, and now a net exporter of fertilizer.
“In 2017, 700,000 tons of urea were exported to West Africa and North and South American markets. Production from the new plant will predominantly target export markets.
“The project will also address the problem of inadequate fertiliser utilisation, which is considered one of the principal constraints to agricultural growth and development in Nigeria, and the entire African continent,” the development bank said.
In 2017, Yemi Osinbajo, Nigeria’s acting president, inaugurated the $1.5 billion Indorama Fertiliser plant in Eleme, Port Harcourt.
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%; training of 200,000 farmers on the proper use of fertilisers expected to reach 2 million by 2021; creation of 50,000 jobs, and an annual contribution of US$2 billion to Nigeria’s GDP.