Canada firm commits $10 mn for Jordan-India fertiliser plant

Cordiant Capital, a Montreal-based fund manager that specialises in loans to private borrowers in emerging markets, has committed a $10 million loan to Jordan-India Fertiliser Company 'JIFCO'.

The loan will finance the construction of a new $186 million plant in Jordan using phosphate rocks from local mines to produce phosphoric acid, a fertiliser, for the Indian market, a statement released here said.

"With the recent dramatic rise in the cost of basic foodstuffs in India, demand for fertilisers is increasing rapidly across the country. Demand for phosphoric acid is likely to keep rising in the longer term as the growth of the Indian middle class and their demand for higher protein content food put more pressure on food supply," said the statement.

In the last ten years, Cordiant funds have provided loans to several agri-businesses in emerging markets, including a sugar producer in India, a crusher and exporter of soybean and ancillary products in Argentina, a banana exporter in Ecuador and a leading farm operator and agri-business group in South America that produces a diversified combination of grain crops such as soy, corn, wheat and barley.

The plant's strategic location near the Eshidiya phosphate mines and its proximity to Jordan's only seaport will keep production and transport costs to a minimum, making the JIFCO fertiliser project very competitive.

The quantity of fertiliser used per hectare in India is only a quarter of that applied in developed economies, making Indian agriculture far less productive.

JIFCO's fertiliser output will be exported to thousands of Indian farmers, improving the productivity of agricultural production and helping ease India's food shortage.

According to the statement, the project will also have a substantial developmental impact on the Jordanian economy as the construction and operation of the plant is expected to directly generate 600 to 1,000 new jobs in South Jordan, where the average income is much lower than in the rest of the country.

The Jordan-India Fertiliser Company project will receive a $125 million loan arranged by the International Financial Corporation (IFC), which includes a $90.1 million IFC B Loan raised from a syndicate of commercial banks and Cordiant Capital. The European Investment Bank (EIB) is also providing a parallel loan of 81 million euros.

The project is sponsored by the India Farmers Fertiliser Cooperative (IFFCO), which sources and distributes fertilisers on behalf of 40,000 farmers' cooperatives across India, and Jordan Phosphate Mines Company (JPMC), which owns and operates a large number of phosphate mines in Jordan.