IEFCL II: A loan to support the fertilizer industry in Nigeria

IEFCL, a fertilizer production company in Nigeria, is a subsidiary of Indorama, one of the Asian leaders in petrochemical byproducts (plastics). The company has been a client of PROPARCO since 2012 (financing of the first production line). In just 18 months of operations, IEFCL has become the leading manufacturer and exporter of nitrogen fertilizers (urea) in Nigeria, with 60% of its production mainly exported to Latin America and West Africa in 2017.

This financing is earmarked for the construction of a second production line for nitrogen fertilizers located next to Line-I in Port Harcourt. Line-II will double the current production capacity to 2.8m tons a year by 2021, for a total cost of USD 1.1bn. In view of the limited sizes of markets in Africa, the bulk of the additional volumes will be exported to Latin America (Brazil) and, to a lesser extent, to North America.

This project should create 300 new permanent operational jobs, with an additional 470 people employed full-time over the next 4 years to work on the construction of the production line (with a total of 518 jobs created or supported over the next 5 years).

The project is also expected to have a positive impact on Nigeria’s trade balance thanks to exports. It will provide a competitive supply of urea for export, in addition to potash and phosphate fertilizers in geographical areas where nitrogen fertilizers are used below UN recommendations.

For the locally consumed part of production (15-20%), the project should contribute to the development of the agriculture sector in Nigeria and West Africa by increasing access to cheap products, which make up for the lack of the required organic nitrogen by improving crop yields and stimulating soil fertilization.

Finally, IEFCL has adopted a production process in line with the highest international standards and does not flare the gas it uses for urea production.