Fertiliser major IFFCO today said it has signed a financing agreement with International Finance Corporation (IFC) and European Investment Bank (EIB) to raise debt of $336 million (about Rs 1,500 crore) for its joint venture phosphoric acid project in Jordan.
The cooperative IFFCO and Jordan Phosphates Mines Company (JPMC) had formed a joint venture Jordan India Fertiliser Company (JIFCO) in 2008 to set up phosphoric acid plant with an investment of $625 million.
In the JV firm, IFFCO holds 52% equity, while JPMC holds 48% equity.
The annual capacity of plant is 4.75 lakh tonne. IFFCO would purchase a minimum 70% of the production of phosphoric acid under a long-term agreement for domestic consumption, while JPMC would buy the balance.
"IFFCO signed the project and financing agreements for the phosphoric acid project being implemented by JIFCO," the company said in a statement.
The agreements were signed by the officials of IFFCO, IFC, EIB, JPMC and JIFCO. "IFC and EIB are the lead arrangers for the debt of $336 million for the project," it added.
The foundation stone for the project was laid in October, 2009, and commercial production is expected to start by mid-2013. JPMC will supply the required quantity of rock phosphate under a long term supply agreement.
"This joint venture project will provide assured supply of phosphate fertilisers to Indian agriculture for sustenance in food grains production," IFFCO Managing Director US Awasthi said.
To meet the growing demand of fertilisers in India, IFFCO has also established JVs in Senegal, Oman, Australia, Peru and Argentina for sourcing a part of its requirement of inputs and finished products.
In India, IFFCO has five plants with annual capacity of 4.24 million tonne of urea.
With the focus on farmers' needs, IFFCO has diversified into insurance, power, value-added-services in mobile telephones for farmers and other sectors through various joint ventures.