International Finance Corporation (IFC), the financial arm of the World Bank Group, has proposed a $73 million funding for Singapore-domiciled chemical group Indorama Corporation’s Nigeria-based venture.
IFC might provide up to $64 million in A loan and up to $9 million in a concessional senior loan for Indorama Eleme Petrochemicals Limited (IEPL) in Port-Harcourt, Nigeria.
The planned financing is for the debottlenecking of IEPL’s olefins and polyolefins plant, including the installation of a new furnace that will expand production capacity, and two heat recovery steam generators (HRSG) to recover energy and improve steam reliability.
The blended finance co-investment “enhances the project economics and enables an investment in an HRSG technology that is not market practice in the country,” IFC said in its proposal dated March 19.
The level of subsidy provided by the blended concessional finance co-investment is estimated to be 3.4% of the total HRSG cost of $19.8 million, it added.
IEPL is the largest producer of polyolefins in West Africa and the second largest in Sub Saharan Africa, according to IFC.
The business is 65% owned by Indorama Corporation, 10% owned by Nigerian National Petroleum Corporation, and the balance is held by Rivers State Government, Host Communities, the Nigerian Federal Government, and its employees.
Last year, IFC also proposed a $150 million loan to Indorama’s Thai unit Indorama Ventures Global Services Limited, as well as another $60 million loan to Indorama’s cotton farming initiatives in Uzbekistan.
Indorama was rooted in 1975 as Indorama Synthetics in Indonesia by ML Lohia and his son SP Lohia. The firm has over 20 manufacturing sites in eight countries manufacturing a multitude of products including nitrogen fertilisers, phosphate fertilisers, polyethylene, polypropylene, polyester, textiles, cotton fibre, and medical gloves.