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IFC Promotes Development of Nigeria’s Petrochemicals Sector, Finances Privatization

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Lagos/Washington, February 21, 2007 — In its largest Sub-Saharan African privatization investment to-date, IFC, the private sector arm of the World Bank Group, has agreed to assist the sale of Nigeria’s Eleme Petrochemical Company Limited to a private investor, supporting the growth of the country’s nascent petrochemicals industry. The sector is crucial to Nigeria’s development, since the value-adding industry converts hydrocarbons such as natural gas liquids into intermediate products used in plastics.

IFC’s $155 million investment is backing Indorama International Finance Plc’s purchase of a 75 percent equity stake in state-owned Eleme. It is also funding a comprehensive turnaround program designed to return Eleme to profitability and full-capacity operation.

“Nigeria’s vast hydrocarbon resources and large consumer market provide it with a natural competitive advantage for the development of a strong and sustainable petrochemicals sector, an advantage the country has so far not capitalized on,” said Rashad Kaldany, IFC’s Director of Oil, Gas, Mining, and Chemicals. “We hope that the successful privatization and turnaround of Eleme will attract further private investment in Nigeria’s petrochemicals industry and pave the way for a major transformation of this sector.”

IFC will provide a $50 million loan and has raised commitments for an additional $80 million from commercial lenders for Indorama Petro Limited, a special purpose vehicle created for the acquisition that is wholly owned by Indorama International Finance. In addition, IFC will provide $25 million in debt directly to Eleme for its turnaround capital expenditure program. Eleme produces petrochemicals, such as polyethylene and polypropylene that are used for a wide range of industrial and household products.

The transaction is expected to increase confidence in Nigeria’s privatization program, help raise Eleme’s environmental performance, and support the implementation of a comprehensive community development plan that is aimed at addressing social needs in parts of the Niger delta.

Thierry Tanoh, IFC’s Director for Sub-Saharan Africa, said, “The successful privatization of Eleme is an example of benefits that can accrue to a country that is committed to implementing reforms. This transaction confirms that international private investors will engage in Nigeria once the business environment is conducive to such investments.”

Indorama has significant investments in Asia across a number of sectors, and IFC’s support for the Indonesia-based group is part of efforts to foster South-South investments, in which leading emerging market companies expand into other emerging markets.

S.P. Lohia, President of Indorama Group, said, “This transaction reinforces our long-standing relationship with IFC and our common commitment to investing in emerging markets.  We hope to make this transaction a success story for foreign investment in Nigeria and for development of a regional plastics industry. As a leading financial institution, IFC is paving the way for other commercial institutions to follow.”

The commercial banks participating in the syndicated loan are Bank of Baroda, Bank of India, Indian Overseas Bank, International Finance Participation Trust, Standard Bank of South Africa, Syndicate Bank, State Bank of India, and VTB Bank Europe. In addition to participating in IFC’s syndication, Standard Bank of South Africa also played a significant role in helping arrange commercial bank financing for Eleme.  

About IFC

IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit

One of IFC’s fastest-growing client countries, Nigeria is IFC’s ninth largest portfolio and its largest exposure in Africa. In FY06, IFC committed $266 million in 10 projects in Nigeria, bringing the committed portfolio for its own account to $544 million, a jump of almost 30 percent from $419 million from a year earlier. Since its first investment in Nigeria in 1964 and as of 30 June 2006, IFC has committed financing to 62 projects amounting to $985 million. Investments include $872 million for IFC’s own account and $113 million for the account of banks participating in loan syndications. For more information, visit