Eleme Fertilizer II (IFC-40420)

Countries
  • Nigeria
Where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Apr 27, 2018
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
INDORAMA ELEME FERTILIZER AND CHEMICALS LTD
The holder of the loan, grant, or other investment.
Sectors
  • Agriculture and Forestry
The service or industry focus of the investment. A project can have several sectors.
Investment Amount (USD)
$ 170.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ IFC website

Updated in EWS Jan 23, 2019

Disclosed by Bank Mar 21, 2018


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Project Description
Project Description

     The Indorama Group (‘Indorama’ or the ‘sponsor’) a long-standing IFC client in several countries, is one of the world’s fastest growing group in petrochemical and fibers business having global business presence in 29 countries including Asia, Africa, Europe and Americas having over 30,000 employees. 

In August 2006, Indorama International Finance Plc, UK (‘Indorama’) purchased a 75% equity stake in erstwhile Eleme Petrochemicals Company Limited (now known as Indorama Eleme Petrochemicals limited) under the federal government’s privatization plan which was successfully assisted by IFC. IFC also assisted Indorama in implementing a turnaround program for olefins, Polyethylene and Polypropylene plants. (IFC Project # 24802.) 

In June 2016, Indorama successfully commissioned 1.4 million metric tons per annum (MMTPA) urea fertilizer facility (including captive Ammonia facility) in Nigeria under Indorama Eleme Fertilizer & Chemicals Limited (‘IEFCL’ or the ‘company’), with investment from IFC parallel lenders and other commercial lenders (IFC Project #30967).

Further, IFC made additional investment in the company to support the jetty that was constructed in the nearby Onne port for the export of fertilizer (IFC Project #38096).

Having successfully commissioned the Line 1 Urea fertilizer plant and the anticipated growth in demand, Indorama recently approved the construction of the second Ammonia / Urea fertilizer line to be located next to its existing line to expand the current capacity from 1.4 MMTPA to 2.8 MMTPA at a cost of approximately US$1.1 billion. (the “project”). The required land of 26 Hectare is already available to set up the new project at the Indorama Petrochemicals complex. The proposed IFC investment for the project includes a US$170m A Loan (including the MCPP Loan) and mobilization of up to US$830m in parallel/B loans.

The public disclosure documents for IFC’s previous investments in this fertilizer facility area available at:

- Project# 24802:  Eleme: https://disclosures.ifc.org/#/projectDetail/ESRS/24802
- Project# 30967: Eleme Fertilizers  https://disclosures.ifc.org/#/projectDetail/ESRS/30967
- Project 38096: Indorama Port: https://disclosures.ifc.org/#/projectDetail/ESRS/38096

The company has, to this date, successfully implemented the Environmental and Social Action Plans (ESAPs) for these investments and has developed sound environmental and social (E&S) management systems and established organizational capacity for the same. For the construction and commissioning of Line 1 and associated facilities, the lenders had commissioned a third-party independent monitoring agency, which has confirmed the overall successful implementation of the ESAP and E&S management systems.

IEFCL’s existing fertilizer manufacturing facility (Line 1) consists of 2,300 metric ton per day (MTPD) of ammonia and 4,000 MTPD of urea production lines, a urea granulation plant, a product warehouse, bulk loading and bagging facilities, ammonia storage and associated utilities such as the demineralized water plant, effluent treatment plant etc. The proposed project (Line 2) will be similar to Line 1.

The ammonia produced in Ammonia Plant is delivered to the urea plant where it is converted into Urea along with CO2, or to the existing 15,000 metric ton atmospheric ammonia storage tank, when the urea plant is under shutdown. After the Urea synthesis, the Urea solution is sent to granulator to produce Urea granules (final product). From the granulator, the urea will be transported by belt conveyor to either bagging/bulk loading or to the urea storage building. The Company to build a new urea storage area with a capacity to hold up to 60,000 metric tons of urea. A portal scraper reclaimer will be used to reclaim the product onto a belt conveyor for transfer to either bulk loading or bagging area and therefrom dispatch for either export or domestic market respectively.

All the utilities required for the project such as power, compressed air etc. will be supplied from the existing on-site facilities which were built together with the Line 1, while the natural gas will be transported to the site via the existing pipeline. The Indorama Petrochemical Complex has five natural gas turbines which generate power for all the operations within the complex. The existing power plant will supply power for the proposed Line 2 as well. As part of the operations, the complex also has a polymer incinerator and a sludge incinerator which will also be used by Line 2.

The existing petrochemical complex has two air separation units to produce gaseous nitrogen and liquid nitrogen. Gaseous nitrogen is directly supplied to the process plants while liquid nitrogen is stored in liquid storage tanks for emergencies. Line 2 will install an additional air separation unit to increase the existing capacity and meet the requirement of the proposed project.

The project will use the existing port terminal which has its own generators, control room, weighbridge, parking areas, firefighting facilities etc. The transfer of urea from the fertilizer plant to the port (for export) or to the domestic market will be by road through the existing road network.

The Indorama manufacturing complex where the project will be located is at Eleme, about 15 kilometers North East of Port Harcourt, the capital of Rivers State (https://goo.gl/maps/pY29GKjEmwN2).

Six host communities are located within a 5-km radius of the project. The communities directly neighboring the project are Akpajo (12,741 inhabitants), Aleto (15,559 inhabitants), Agbonchia (17,994 inhabitants), Njuru  (7,712 inhabitants), Okerewa (6,668 inhabitants), and Wakaohu family of  Elelenewo (1,800 inhabitants) totaling about 62,473 inhabitants. The members of these communities are familiar with industrial installations as they are in a municipality that draws economic benefits from petrochemical industries.

Line 2 construction activities are expected to commence in the 2nd quarter of 2018 and last for about 3 years

Investment Description
  • International Finance Corporation (IFC)
Private Actors
  • INDORAMA ELEME FERTILIZER AND CHEMICALS LTD -- Implementing Company

The Indorama Group (‘Indorama’ or the ‘sponsor’) a long-standing IFC client in several countries, is one of the world’s fastest growing group in petrochemical and fibers business having global business presence in 29 countries including Asia, Africa, Europe and Americas having over 30,000 employees. In August 2006, Indorama International Finance Plc, UK (‘Indorama’) purchased a 75% equity stake in erstwhile Eleme Petrochemicals Company Limited (now known as Indorama Eleme Petrochemicals limited) under the federal government’s privatization plan which was successfully assisted by IFC. IFC also assisted Indorama in implementing a turnaround program for olefins, Polyethylene and Polypropylene plants. (IFC Project # 24802.) In June 2016, Indorama successfully commissioned 1.4 million metric tons per annum (MMTPA) urea fertilizer facility (including captive Ammonia facility) in Nigeria under Indorama Eleme Fertilizer & Chemicals Limited (‘IEFCL’ or the ‘company’), with investment from IFC parallel lenders and other commercial lenders (IFC Project #30967). Further, IFC made additional investment in the company to support the jetty that was constructed in the nearby Onne port for the export of fertilizer (IFC Project #38096).

Contact Information

Contact Person:   Mr. Kendirck Oluka
Company Name: Indorama Eleme Fertilizer & Chemicals Limited (IEFCL)
Address:              Indorama Complex, East-West Expressway, Eleme, P.M.B. 5151,
                            Port Harcourt, Rivers State, Nigeria
Email:                kendrick@indorama.com.ng
Phone:               +234 805 506 4248                                       

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