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.
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.
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.