IFC, Singapore’s Agrocorp partner to improve food security in Bangladesh
To improve food security in Bangladesh amidst a global shortfall of staple crops, the International Finance Corporation (IFC) is providing a $32.5 million loan to Agrocorp International Pte Ltd to improve food security to the South Asian country.
Singapore-based agricultural commodity-trading company Agrocorp International Pte Ltd is a leading supplier of wheat and pulses to Bangladesh.
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, said an IFC press release.
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.” Vijay added.
Geoffrey Yeo, Assistant Chief Executive Officer, Enterprise Singapore said, “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”
“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.” added Yeo.
The war in Ukraine has exacerbated food inflation globally, sparked high and volatile energy and fertilizer prices and restrictive trade policies, and has also worsened supply-chain disruptions caused by the COVID-19 pandemic.
The release said wheat has been particularly affected, as Ukraine and Russia have traditionally accounted for over a quarter of the global-trade volumes.
“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.” added Gomez.
The IFC investment is in line with a new $6 billion Global Food Security Platform (GFSP), which aims to mobilize 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 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.
Source: BSS
