IFC and Agrocorp Collaborate to Enhance Bangladesh's Food Security.
- Feb. 4, 2023
- FMCG HORECA BUSINESS
In response to rising commodity prices and a global shortage of staple crops, the International Finance Corporation (IFC) is providing a $32.5 million loan to Agrocorp International Pte Ltd, a leading supplier of wheat and pulses to the South Asian nation of Bangladesh, in order to improve food security in Bangladesh.
IFC, the largest global development institution focusing on the private sector in emerging markets, is providing an eight-year financing package that includes a senior secured loan of up to $18 million and a concessional loan of $14.5 million from the International Development Association's Private Sector Window Blended Finance Facility.
The investment will allow Agrocorp to purchase and deliver millions of tons of wheat and pulses from Australia and Canada to Bangladesh, supplying the country with safe, nutritious, and calorie-rich staples at a time of heightened food insecurity, when trade financing has been constrained globally due to price volatility.
The IFC in Dhaka said on Tuesday that these basics are sold to millers and food processors, who rely on them to make basic meals for the Bangladeshi populace (Dec 13).
Vijay Iyengar, Chairman and Managing Director of Agrocorp International, said, "Agrocorp plays a significant role in addressing food security in Asia, which has become even more crucial given the recent disruptions in global food-supply chains."
"We are thrilled to be cooperating with IFC on this financing, which will enable us to expand our efforts to create an even better platform for securing food supply for developing countries like Bangladesh."
The conflict in Ukraine has increased global food inflation, triggered high and fluctuating energy and fertilizer prices and restrictive trade policies, and aggravated COVID-19-related supply-chain disruptions.
Wheat has been especially impacted, since Ukraine and Russia have historically accounted for more than a quarter of world trade volumes. In addition, a quarter of Bangladesh's 165 million-person population faces food insecurity owing to the effects of climate change and the increasing frequency of natural disasters, such as monsoon-caused floods.
IFC's Regional Director for South Asia, Hector Gomez Ang, said that this investment would enable food growers and processors in Bangladesh have access to safe, nutrient-rich staple foods. The IFC's investment in Singapore's Agrocorp comes at a crucial moment, when pandemic-related disruptions and geopolitical tensions undermine global food-supply networks.
The IFC investment is consistent with a new $6 billion Global Food Security Platform (GFSP) that intends to mobilize private investment to combat the degradation of food security, especially in the world's most vulnerable nations. IFC's funding of Agrocorp exemplifies its support for Singapore's expanding position as a champion of 'South-South' investment, a phrase used to characterize investment flows between developing nations.
This investment is a significant source of funding for developing nations and a way of transferring standards, expertise, and successful business models.
IFC has a proven track record of assisting Singapore-based companies with ambitions to expand in emerging markets by utilizing innovative structures, local currency financing solutions, access to capital markets, and knowledge gained from more than six decades of creating global markets and opportunities. Approximately the last decade, IFC has given over $6 billion in commitments to Singaporean companies to assist their development into developing countries.