Buenos Aires, July 24, 2020 — IFC,
a member of the World Bank Group, is providing a US$100 million loan to
support the expansion plan in the dairy sector of Adecoagro, a leading
agribusiness company in Argentina. This investment will help foster an
innovative, sustainable approach to developing the dairy industry, an important
component of the agribusiness sector in Argentina, which is a key economic
driver for the country, accounting for 63 percent of its total exports.
Adecoagro is a leading producer of food and
renewable energy with operations in Argentina, Brazil, and Uruguay. IFC’s
investment will support Adeco Agropecuaria, Pilaga and L3N, three Argentine
subsidiaries of Adecoagro.
The US$100 million financing package consists
of a US$57.25 million loan on IFC’s own account, including a US$17.8 million
IFC Green Loan* tranche that will fund wastewater treatment and climate-friendly
projects, representing the first IFC Green Loan in the real sector in Argentina
and the first IFC Green Loan in the dairy and animal protein sector globally.
The remaining US$42.75 million will be loaned through the IFC Managed Co-Lending
Portfolio Program (MCPP), a platform that allows institutional investors
the opportunity to passively participate in IFC’s future loan portfolio.
The tenor for both tranches is eight years, including a two-year grace
IFC’s loan will support Adecoagro’s investment
program in the dairy sector in Argentina, which has a comparative advantage,
with some of the lowest production costs globally, and potential to grow.
It will provide long-term financing for the acquisition and efficiency
improvement of two dairy processing facilities and the construction of
two dairy free-stalls to expand milk production, an innovation for the
local market which is expected to increase resource efficiency, productivity
and improve animal welfare.
At the same time, the loan will also foster
efficiency and finance climate-related activities such as establishing
an anaerobic bio-digester to produce renewable energy from animal waste
that will be sold to the grid, and financing the revamping of the two dairy
processing facilities. The positive environmental impacts of the Green
Loan activities will help reduce greenhouse-gas emissions and cut energy
and water consumption. IFC will also provide technical advice to Adecoagro
on improving resource efficiency in their operations.
“Through this investment, IFC will contribute
to strengthen the competitiveness of Argentina’s dairy sector by providing
access to long-term financing to Adecoagro at a time when funding options
are limited,” said David Tinel, IFC Country Manager for Argentina,
Chile, Paraguay and Uruguay. “This highlights IFC’s continued commitment
to provide counter-cyclical support to its clients and help accelerate
the country’s recovery from the economic impacts of the pandemic.”
“The IFC Green Loan confirms Adecoagro’s
commitment to sustainable agribusiness production under world-class standards,
and will allow it to expand its production sustainably at a time of global
uncertainty,” said Alejandro López Moriena, Adecoagro’s Chief Sustainability
Officer. “The program will also support rural livelihoods by preserving
and creating quality jobs at a crucial time.”
IFC’s strategy in Argentina focuses on financing
projects with significant development impact that spur economic growth,
innovation and job creation. Priority sectors include agribusiness, infrastructure,
energy, and financial intermediaries to reach SMEs. Through its advisory
programs, IFC works with governments and companies to help establish the
conditions that will attract the most private capital, enabling the private
sector to grow and create jobs. For more information about IFC in Latin
America and the Caribbean, visit www.ifc.org/lac.
* A Green Loan is a loan that is aligned
with the Green Loan Principles of the Loan Market Association.
IFC—a sister organization of the World Bank
and member of the World Bank Group—is the largest global development institution
focused on the private sector in emerging markets. We work in more than
100 countries, using our capital, expertise, and influence to create markets
and opportunities in developing countries. In fiscal year 2019, we invested
more than $19 billion in private companies and financial institutions in
developing countries, leveraging the power of the private sector to end
extreme poverty and boost shared prosperity. For more information, visit
Adecoagro was founded in 2002 by a group
of Argentine and international agricultural entrepreneurs. The company
is a leading agribusiness producer of food and renewable energy with operations
in Argentina, Brazil, and Uruguay. In Argentina, Adecoagro produces corn,
wheat, sunflower, peanuts, soybean, rice and raw milk, and more recently
processes dairy products. For more information, visit www.adecoagro.com.