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Nigeria is Africa’s largest economy and largest oil producer, but almost a third of its citizens live in extreme poverty. Its economy is heavily dependent on crude oil exports, and is vulnerable to swings in global demand. IFC’s support for Eleme Petrochemicals Company Ltd. aims to help Nigeria capture more of the economic benefits of processing its own natural resources.
Eleme Petrochemicals Company Ltd. is located in the Niger Delta and is the only stand-alone petrochemicals complex in Nigeria. In 2007, when Eleme was in the process of being privatized, the Indorama Group of Indonesia approached IFC to help it finance an acquisition of the company and make its first investment in Africa. IFC structured an innovative acquisition and project-financing package, including an initial $50 IFC million loan and $112 million of financing from other investors. IFC also helped Eleme manage environmental impacts and develop a comprehensive community development plan to address social needs like electricity and clean water in the Niger Delta.
Indorama implemented a turnaround capital investment plan and returned Eleme to full production. So instead of drawing upon taxpayer resources to remain afloat as it did before privatization, Eleme became the source of millions of dollars of tax payments--$87 million in 2012 and 2013.
The investment became the building block to other regional manufacturing industries in Nigeria. In 2013, IFC supported Eleme’s expansion of Nigeria’s largest fertilizer production facility with a $375 million financing package including $150 million from IFC and $225 million mobilized from other development finance institutions. Local production of fertilizer is reducing costs for farmers, helping them improve farm yields and agricultural productivity, which are critical to Nigeria’s long-term food security.