Indorama Eleme Fertilizer & Chemicals Limited

West Africa,Africa Manufacturing

Indorama Eleme Fertilisers and Chemicals in Port Harcourt, Nigeria, operates the world’s largest single train urea plant and is the biggest urea producer in sub-Saharan Africa.

  • Active
  • Exited

Our investment

We first made a $40 million loan to the company in 2013 and followed that up with $100 million loan in 2018. Those loans were to support the construction of this fertilizer manufacturer, with the aim of helping Nigeria, which is heavily dependent on imported fertilizer, to become self-sufficient. In 2020, we provided additional debt financing of $25 million for the construction of a feed conditioning unit to be installed as part of one of Indorama’s fertiliser production lines. The unit will separate the heavier hydrocarbons from the feed gas and provide a steady, methane-rich feed gas to Indorama’s fertiliser plant. The heavy hydrocarbons are then used as a feed for production of polyolefins at Indorama Eleme Petrochemicals Ltd. The feed conditioning unit will save 70,000 tonnes of CO2 equivalent per year, recovering CO2 that would otherwise be vented.

Impact
  • Save CO2 emissions through increased resource efficiency (SDG 9.4).
  • Support economic opportunities and economic growth (SDG 8.1, 8.2) through new industrial growth (SDG 9.2).
How?
  • Direct: The investment will save greenhouse gas emissions by recovering Co2 that would otherwise be vented and through avoiding flaring of heavier hydrocarbons which will be used in downstream polyolefin production.
  • Economic enabler: The investment will enable increased polyolefin production equivalent to c. 10 per cent of Nigeria’s annual domestic consumption. Increased availability of polyolefins is expected to meet the growing need of Nigeria’s domestic market, contributing to increasing domestic value addition.
Stakeholder Geography Characteristics
Planet

Global

N/A

Businesses and employees

Nigeria

Downstream employees in polyolefin value chain, assumed to be semi-skilled

Scale Depth/Duration
  • Planet: Forecast to reduce greenhouse gas emissions by c. 70,000 tonnes of CO2 equivalent per year, equivalent to c. 37MW of installed wind capacity, or the emissions of c. 140,000 Nigerians.
  • Businesses and employees: Based on IFC’s estimates, the company’s operations will contribute $43 million to Nigeria’s GDP directly and $98 million indirectly through linkages to the local economy.
  • Planet: Saving of emissions will occur from 2022 for the operational life of Indorama’s second fertiliser line (Line 2). The feed conditioning unit will contribute to net carbon emissions being 28 per cent lower than comparable plants due to avoidance of gas flaring and energy efficiency.
  • Businesses and employees: Impact from 2022 onwards for the operational life of Indorama’s second fertiliser line. Changes in an economy’s structure are long-lasting and have a deep impact on the economy.
Grid Score Contribution

3.63

To help us direct our investments, we use a tool called the Development Impact Grid. The Grid scores every investment we plan out of a score of four, based on two factors: the difficulty of investing in the country and whether investment in that sector will lead to jobs.

Financial: Capital is not offered on the same terms, with long tenor being the key differentiator to the commercial bank market.

Risk
  • Evidence: Resulting from a lack of high-quality data to assess the scale and depth of income generating opportunities created from downstream linkages.
  • Unexpected: Negative environmental impact resulting from increase in polyolefins materials production (high energy intensity) and from the challenges posed by end-of-life management of polymers which are not biodegradable. This risk may offset some of the environmental benefit associated with the feed conditioning unit.

Expected impact

The business will create 360 direct jobs and 250 indirect ones, as well as a further 3500 during the construction phase.

Health and safety is a top priority at the plant. Each group of workers is assigned an environmental health and safety (EHS) officer and first aider, and before every shift, workers attend an EHS briefing on the day’s tasks.

Extensive EHS training is also provided, including on defensive driving, working at height, rigging, crane operations, scaffolding, and safe use of tools. This focus meant that by the end of 2014, and with over seven million hours worked, the project had experienced zero fatalities and just one road traffic accident.

More importantly, with a growing population and limited available arable land, the project can support food security in Nigeria by bringing affordable fertilizers to the market that can boost crop productivity and land yields.

Environmental and social aspects

The company has a robust environmental and social management system (ESMS), particularly regarding health and safety as evidenced by the good performance to date. We are working with company and other lenders to ensure that it continues to operate in accordance with international environmental and social standards.

Key facts

Status:
Active
Region

Since 2012, we’ve only invested in Africa and South Asia. Investments outside these regions are from our pre-2012 portfolio.

:
Africa, West Africa
Countries:
Nigeria
Sector

We have seven priority sectors. However, we continue to invest outside these sectors, largely in the most challenging regions, as new investment supporting any sector helps to underpin the private sector, and create jobs and livelihoods for people.

:
Manufacturing
Website:
http://www.indorama.com/
Investment type

We provide capital in three broad ways: direct equity, debt, and intermediated equity (principally through investment funds).

:
Direct Debt
Start date

For direct investments, this is the date CDC committed capital to the business or project.

For funds, this is the date that CDC committed capital to the fund.

For underlying fund investments, this is the date that the fund invested capital into the business.e

:
February 2013
Amount

For direct investments, this is the total amount that CDC has committed to the business or project (it may be a combination of equity and debt).

For funds, this is the total amount that CDC has committed to the fund.

:
$165m
Domicile

This is the investee company’s place of incorporation; or a fund’s jurisdiction.

:
Nigeria

We are invested in Indorama Eleme Fertilizer & Chemicals Limited through European Financing Partners IV, which is managed by European Financing Partners.

We do not hold direct relationships with the companies that investment funds invest in. Instead, we hold relationships directly with the fund. When investing through investment funds, CDC takes an active role as a limited partner to the fund, working with the fund manager to ensure best practices, including in environment, social and governance matters, and investment management oversight.

For further information on the fund, the fund manager, and the expected impact of the fund’s investment, click here.

Key facts

Status:
Active
Region

Since 2012, we’ve only invested in Africa and South Asia. Investments outside these regions are from our pre-2012 portfolio.

:
Africa, West Africa
Countries:
Nigeria
Sector

We have seven priority sectors. However, we continue to invest outside these sectors, largely in the most challenging regions, as new investment supporting any sector helps to underpin the private sector, and create jobs and livelihoods for people.

:
Manufacturing
Website:
http://www.indorama.com/
Investment type

We provide capital in three broad ways: direct equity, debt, and intermediated equity (principally through investment funds).

:
Intermediated investment
Fund:
European Financing Partners IV
Fund Manager:
European Financing Partners
Start date

For direct investments, this is the date CDC committed capital to the business or project.

For funds, this is the date that CDC committed capital to the fund.

For underlying fund investments, this is the date that the fund invested capital into the business.e

:
April 2013
Domicile

This is the investee company’s place of incorporation; or a fund’s jurisdiction.

:
Nigeria

We are invested in Indorama Eleme Fertilizer & Chemicals Limited through Neoma Africa Fund III, which is managed by Actis LLP.

We do not hold direct relationships with the companies that investment funds invest in. Instead, we hold relationships directly with the fund. When investing through investment funds, CDC takes an active role as a limited partner to the fund, working with the fund manager to ensure best practices, including in environment, social and governance matters, and investment management oversight.

For further information on the fund, the fund manager, and the expected impact of the fund’s investment, click here.

Key facts

Status:
Active
Region

Since 2012, we’ve only invested in Africa and South Asia. Investments outside these regions are from our pre-2012 portfolio.

:
Africa, West Africa
Countries:
Nigeria
Sector

We have seven priority sectors. However, we continue to invest outside these sectors, largely in the most challenging regions, as new investment supporting any sector helps to underpin the private sector, and create jobs and livelihoods for people.

:
Manufacturing
Website:
http://www.indorama.com/
Investment type

We provide capital in three broad ways: direct equity, debt, and intermediated equity (principally through investment funds).

:
Intermediated investment
Fund:
Neoma Africa Fund III
Fund Manager:
Actis LLP
Start date

For direct investments, this is the date CDC committed capital to the business or project.

For funds, this is the date that CDC committed capital to the fund.

For underlying fund investments, this is the date that the fund invested capital into the business.e

:
October 2016
Domicile

This is the investee company’s place of incorporation; or a fund’s jurisdiction.

:
Nigeria

CDC is becoming British International Investment