The International Finance Corporation (IFC) is providing a US$32.5mn loan to Agrocorp International Pte Ltd to improve food security in Bangladesh
IFC is providing an eight-year financing package consisting of a senior secured loan of up to US$18mn as well as a concessional loan of US$14.5mn from the International Development Association’s Private Sector Window Blended Finance Facility.
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. 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.”
The war in Ukraine has exacerbated food inflation globally, sparked high and volatile energy and fertiliser prices and restrictive trade policies, and has also worsened supply-chain disruptions caused by the Covid-19 pandemic. Wheat has been particularly affected, as Ukraine and Russia have traditionally accounted for over a quarter of the global-trade volumes.
In addition, about a quarter of Bangladesh’s population of 165mn people face food insecurity due to the impacts of climate change and the rising frequency of natural hazards, such as flooding caused by monsoon rains. This convergence of crises threatens to drive more people into extreme poverty, magnify hunger and malnutrition, and erase hard-won development gains in the country.
“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.”
