Fairfax-controlled National Collateral Management Services Ltd. (NCML) will invest around Rs 500 crore to develop grain storage silos in India under a 32-year concession agreement awarded by the Food Corporation of India. The proposed investment will be backed by International Finance Corporation, investment arm of the World Bank.
The total Project cost is Rs 506 crore and IFC’s proposed investment is by way of subscription to unlisted, secured Non-Convertible Debentures for a total of up to 330 crore to be issued by the 7 Project SPVs. These SPVs will develop grain silos with a capacity of 50,000 metric tonnes each at 7 locations in the states of Haryana, Punjab, and Uttar Pradesh.
NCML through its wholly-owned project subsidiaries is developing grain storage silos in India under a 32-year concession agreement awarded by the Food Corporation of India.
IFC expects the project to support the government's ability to manage the grain stocks more efficiently, thus benefiting consumers and farmers through better access to staple foods and reduced spoilage.
The most significant expected project-level outcome is the expected reduction in post-harvest losses associated with introduction of modern silos, which in turn would have positive implications both for food security of the Indian consumers and favorable environmental effects from avoided Greenhouse gases emissions. Food safety can be compromised in traditional storage facilities since torn bags, transferred manually numerous times, put the wheat inside at risk of contamination. The shift from warehouse to silos is expected to reduce wheat losses as a result of improved logistics and better overall facilities, said IFC.
NCML is one of the few leading private sector entities in India specialising in post-harvest commodity-based services and providing integrated supply chain solutions and risk management services to producers, traders, end-users of agricultural commodities, and lenders. The company operates approximately 800 warehouses in 16 Indian states and caters to 42 agricultural commodities across the two crop seasons in India – Rabi and Kharif.