To improve food security in Bangladesh at a time of rising commodity prices amidst a global shortfall of staple crops, the International Finance Corporation (IFC) is providing a $32.5 million loan to Singapore-based agricultural commodity-trading company Agrocorp International Pte Ltd, which is a leading supplier of wheat and pulses to the South-Asian country.
IFC, the largest global development institution focused on the private sector in emerging markets, is providing an eight-year financing package consisting of a senior secured loan of up to $18 million as well as a concessional loan of $14.5 million from the International Development Association’s Private Sector Window Blended Finance Facility.
At a time when trade financing has been constrained globally amid price instability, the investment will allow Agrocorp to buy and deliver millions of tons of wheat and pulses from Australia and Canada to Bangladesh, providing safe, nutritious, and calorie-rich staples to the country at a time of heightened food insecurity. These staples are sold to millers and food processors, which depend on them to produce basic foods for the Bangladeshi population.
“Agrocorp plays an important role in addressing food security in Asia, which has become more vital with all the recent shocks in global food-supply chains,” said Vijay Iyengar, Chairman and Managing Director, Agrocorp International “We are delighted to be partnering with IFC for this loan, which will allow us to scale up our work to provide an even stronger platform to secure food supplies for emerging markets such as Bangladesh.”
“We are pleased that IFC is able to provide financial support for Agrocorp to reinforce its position in global food supply chains, and in this instance to serve the markets in Bangladesh during these challenging times”, said Geoffrey Yeo, Assistant Chief Executive Officer, Enterprise Singapore. “We are glad that Singapore’s role as a global trade hub has enabled companies like Agrocorp to play an important role in managing global food supplies. These are the companies that play a critical role in food security and ensuring the smooth continuity of food flows across the region.”
The war in Ukraine has exacerbated food inflation globally, sparked high and volatile energy and fertiliser prices and restrictive trade policies, and has also worsened supply-chain disruptions caused by the Covid-19 pandemic. Wheat has been particularly affected, as Ukraine and Russia have traditionally accounted for over a quarter of the global-trade volumes.
In addition, about a quarter of Bangladesh’s population of 165 million people face food insecurity due to the impacts of climate change and the rising frequency of natural hazards, such as flooding caused by monsoon rains. This convergence of crises threatens to drive more people into extreme poverty, magnify hunger and malnutrition, and erase hard-won development gains in the country.
“This investment ensures the supply of essential raw materials to food producers and processors in Bangladesh, allowing the availability of safe, nutritious, and calorie-rich staple foods to be available”, said Hector Gomez Ang, Regional Director for South Asia, IFC. “IFC’s funding to Singapore’s Agrocorp comes at a critical time, as pandemic-related disruptions and geopolitical tensions impact global food-supply chains.”
The IFC investment is in line with a new $6 billion Global Food Security Platform (GFSP), which aims to mobilise private investment to address the deterioration in food security, particularly in the world’s most vulnerable countries. IFC’s financing to Agrocorp is also illustrative of its support to Singapore in its growing role as a champion of ‘South-South’ investment, a term used to describe investment flows between emerging markets.
Such investment is a key source of financing for developing countries, and a means to transfer standards, knowledge, and successful business models. IFC has a successful track record of supporting Singapore-based companies with ambitions to expand in emerging markets using innovative structures, local currency financing solutions, access to capital markets and knowledge gained from more than six decades creating markets and opportunities around the world. IFC has provided over $6 billion in commitments to Singaporean clients over the last decade to support their expansion into emerging markets.
In addition, since 2010, IFC has invested over $3.6 billion to help private sector growth in Bangladesh.
About Agrocorp
Agrocorp is a global agri-commodity firm specialising in the sale of staple food products such as wheat, pulses and sugar to the leading food manufacturers in the Asia Pacific and Middle Eastern regions. Headquartered in Singapore, Agrocorp started trading agri-commodities in 1990 and has since grown to achieve over US$3 billion in turnover, handling more than 30 agri-commodity products across 50 countries.
Agrocorp is also one of the leading traders of pulses in the world and operates nine plants in Australia, Canada and the US that process pulses into value-added products. The company recently launched its plant-based ingredients business and plant-based food brand, HerbYvore, all part of its vision to better nourish a changing world through responsible and sustainable sourcing and food production.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries.
In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
About the IDA Private Sector Window
The International Development Association’s (IDA) Private Sector Window was launched in 2017 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA’s objectives and the World Bank Group’s twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution, and the World Bank Group’s other tools and approaches are insufficient. For more information, visit: http://ida.worldbank.org/psw.
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