• Sunday, May 19, 2024
businessday logo

BusinessDay

RMB, Indorama secure $1.25bln financing package for export expansion

RMB, Indorama secure $1.25bln financing package for export expansion

Rand Merchant Bank (RMB), a division of First Rand Bank, recently played a key role in securing a $1.25 billion financing package for Indorama Eleme Fertilizer and Chemicals Limited.

The bank disclosed this in a statement made available to BusinessDay, stating that RMB acted as a lead arranger alongside IFC as mandated lead arranger, which contributed $75 million via an 8-year senior debt under the IFC A/B loan programme to support Indorama’s expansion in Nigeria.

The strategic financing is aimed at enhancing Indorama’s fertilizer production capabilities and to develop a new port terminal for exports in Port Harcourt, Nigeria.

“This project underscores our willingness to collaborate with key stakeholders in delivering blended finance for strategic industrial assets in Nigeria and Africa in general,” Enyinna Anumudu, senior transactor for infrastructure finance, Africa ex-SA at Rand Merchant Bank, stated.

According to Anumudu, the comprehensive financial package is expected to support Indorama’s plan to develop a third nitrogenous urea fertilizer production line with an annual capacity of 1.4 million metric tons.

Accordingly, the expansion is intended to strengthen food production and security across regional and international markets, as well as support Nigeria’s heavy industry sector.

“First Rand Bank through its Rand Merchant Bank Division is pleased to continue its support of Indorama Fertilizer’s operations in Nigeria as a strategic client within the heavy industry space in Nigeria.

“The Train 3 project will support the processing and beneficiation of associated and non-associated gas in the domestic economy while also generating significant USD export earnings in line with the non-oil exports diversification strategy of the Nigerian Federal Government,” Anumudu stated.

He stated further that the financing package was mobilised in collaboration with other development finance institutions and commercial banks (AfDB, Bangkok Bank, British International Investment, Citibank, DZ Bank, and Emerging Africa Infrastructure Fund), aligning with Nigeria’s strategic efforts to eliminate routine gas flaring by 2030, to further emphasise the environmental sustainability of the project.

According to Anumudu, the expansion of Indorama’s facilities is expected to generate about 8,000 direct and indirect jobs, bolstering job creation and promoting industrial growth within the region.

“As Nigeria prepares to enhance its position as a key exporter of fertilizer to Africa and the global market, this project marks a significant milestone in the country’s journey towards becoming a major player in the global fertilizer market.

“Rand Merchant Bank’s involvement in this transformative project underscores its dedication to supporting Nigeria’s industrial and economic diversification efforts, contributing to broader food security and stimulating agricultural growth across the continent,” he stated.