IFC Finances Fertilizer Plant in China, Supporting Sichuan Earthquake Recovery Efforts
In Washington:
Hannfried von Hindenburg
Phone: +1 (202) 458-5613
E-mail: hvonhindenburg@ifc.org
In Hong Kong:
Andrew Mak
Phone: + (852) 2509-8110
E-mail: amak@ifc.org
Hong Kong/Washington, D.C., May
18, 2009—IFC, a member of the World Bank Group, is financing the construction
of a 450,000 ton-per-annum fertilizer plant in China’s Sichuan Province,
helping the region recover from a devastating earthquake last year by addressing
a fertilizer shortage in one of the country’s most important agricultural
centers.
IFC has signed a $20 million loan and
a $10 million equity investment with Koyo Ecological Agrotech Group Ltd.
in support of its ammonia and urea plant in Dazhou City. The transaction
is expected to improve the living standards of local farmers while also
raising Koyo’s environmental performance.
“IFC’s involvement is critical to
the success of the project,” said Koyo Chairman Li Weiruo. “Not only
is IFC providing long-term capital which became scarce in the wake of the
global financial crisis, but IFC’s technical support will also assist
in implementing leading environmental standards for the plant’s operation.
Completion of the plant will enable us to reach out to more than 1 million
farmers.”
IFC has responded to the May 2008 Sichuan
earthquake and the global financial crisis by filling financing gaps and
supplementing the efforts of China’s central, provincial, and local governments
to address infrastructure and basic social needs. Providing equity and
long-term debt to Koyo will enable the company to complete the construction
of the plant and satisfy its financing needs over the next nine years.
“IFC is pleased to support Koyo and
the reconstruction efforts in Sichuan,” said Somit Varma, IFC’s Director
of Oil, Gas, Mining, and Chemicals. “We hope that the success of Koyo’s
ammonia-urea plant will spur further private sector involvement in the
earthquake recovery efforts. We also look forward to more investments in
companies like Koyo that can dramatically improve the lives of local farmers
and residents.”
Last year’s earthquake in Sichuan caused
an estimated $6 billion dollars in damage to agriculture. More than 30
million people in rural communities were severely affected, losing most
of their assets. The earthquake also disrupted the supply of fertilizer
in the region, a critical need to restore crop production. Twenty percent
of Sichuan’s GDP comes from agriculture--significantly more than the national
average.
Koyo is committed to training local
farmers in best practices of fertilizer usage. Many of the region’s farmers
are using less sophisticated methods of fertilizer application, often losing
up to 50 percent of the nutrients. Koyo’s university-trained agricultural
specialists assist farmers in improving fertilizer use through soil analysis,
correct blending, and timing of application, significantly enhancing crop
yields.
About IFC
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous
year. For more information, visit www.ifc.org.
About Koyo
Koyo Ecological Agrotech (Group) Ltd.,
together with its subsidiaries, is engaged in the research and development,
manufacture, marketing and distribution of chemical products, chemical
fertilizers and bulk blending fertilizers. The company is focused on the
manufacture and distribution of chemical fertilizers and chemical products,
including bulk blending fertilizers and complex fertilizers, sodium carbonate,
urea, ammonium chloride, ammonium bicarbonate and ammonia. For more information,
visit www.koyochem.com.
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