British International Investment

Indorama Eleme Fertilizer & Chemicals Limited

West AfricaManufacturing

Indorama Eleme Fertilizers and Chemicals in Port Harcourt, Nigeria, operates the world’s largest single train urea plant and is the biggest urea producer in sub-Saharan Africa.

Our investment

Description of the investment.

We first made a $40 million loan to the company in 2013 and followed that up with $100 million loan in 2018. Those loans were to support the construction of this fertilizer manufacturer, with the aim of helping Nigeria, which is heavily dependent on imported fertilizer, to become self-sufficient. In 2020, we provided additional debt financing of $25 million for the construction of a feed conditioning unit to be installed as part of one of Indorama’s fertiliser production lines. The unit will separate the heavier hydrocarbons from the feed gas and provide a steady, methane-rich feed gas to Indorama’s fertiliser plant. The heavy hydrocarbons are then used as a feed for production of polyolefins at Indorama Eleme Petrochemicals Ltd. The feed conditioning unit will save 70,000 tonnes of CO2 equivalent per year, recovering CO2 that would otherwise be vented.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Save CO2 emissions through increased resource efficiency (SDG 9.4).
  • Support economic opportunities and economic growth (SDG 8.1, 8.2) through new industrial growth (SDG 9.2).

How?

How?
  • Direct: The investment will save greenhouse gas emissions by recovering Co2 that would otherwise be vented and through avoiding flaring of heavier hydrocarbons which will be used in downstream polyolefin production.
  • Economic enabler: The investment will enable increased polyolefin production equivalent to c. 10 per cent of Nigeria’s annual domestic consumption. Increased availability of polyolefins is expected to meet the growing need of Nigeria’s domestic market, contributing to increasing domestic value addition.

Who?

Stakeholder Geography Characteristics
Planet

Global

N/A
Businesses and employees

Nigeria

Downstream employees in polyolefin value chain, assumed to be semi-skilled

How much?

Scale Depth/Duration
  • Planet: Forecast to reduce greenhouse gas emissions by c. 70,000 tonnes of CO2 equivalent per year, equivalent to c. 37MW of installed wind capacity, or the emissions of c. 140,000 Nigerians.
  • Businesses and employees: Based on IFC’s estimates, the company’s operations will contribute $43 million to Nigeria’s GDP directly and $98 million indirectly through linkages to the local economy.
  • Planet: Saving of emissions will occur from 2022 for the operational life of Indorama’s second fertiliser line (Line 2). The feed conditioning unit will contribute to net carbon emissions being 28 per cent lower than comparable plants due to avoidance of gas flaring and energy efficiency.
  • Businesses and employees: Impact from 2022 onwards for the operational life of Indorama’s second fertiliser line. Changes in an economy’s structure are long-lasting and have a deep impact on the economy.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Capital is not offered on the same terms, with long tenor being the key differentiator to the commercial bank market.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

3.63

Risk

Evidence Risk
  • Resulting from a lack of high-quality data to assess the scale and depth of income generating opportunities created from downstream linkages.
Unexpected Impact Risk
  • Negative environmental impact resulting from an increase in polyolefins materials production (high energy intensity) and from the challenges posed by end-of-life management of polymers which are not biodegradable. This risk may offset some of the environmental benefit associated with the feed conditioning unit.

Understanding our impact information (PDF)

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.
  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

Working as part of the group of DFIs, we agreed an ESAP, focused on extending the existing ESMS to cover construction and operation of Line III including E&S risk assessments, and management of labour and working conditions of contractors.

Environmental and social risk

Medium-High

Understanding our approach to environmental and social risk (PDF)

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to reportsandcomplaints@bii.co.uk or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at enquiries@bii.co.uk

  • Key facts
    First published

    When the investment was first published on the website database.
    :
    June 2024
    Last updated

    When the last quarterly update of the website database occurred.
    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.
    :
    D223
    Status

    The current status of the investment (green flag for active and red flag for exited).
    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.
    :
    West Africa
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.
    :
    Nigeria
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Manufacturing

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.
    Investment type :
    Debt
    Start date :
    March 2024
    Amount :
    $65m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.
    :
    Nigeria

    Download as PDF

    Click here to read our data guidance

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 03 $25m West Africa Manufacturing June 2020 Active
Investment 03 $25m West AfricaWest Africa Manufacturing June 2020 Active
Investment 03 $25m West AfricaWest AfricaWest Africa Manufacturing June 2020 Active

Back to investments

How we invest

Find out more

Portfolio data

Find out more

Subscribe to receive our latest news and updates

Sign-up here