Global food and agri-business company, Olam International and its wholly owned subsidiary, Olam Treasury Pte. Ltd., have secured multi-tranche financing facilities aggregating $176 million.
The company disclosed that the financing arrangement was facilitated by the International Finance Corporation (IFC) and Japan International Cooperation Agency (JICA).
The facilities consist of two tranches; a 5-year term loan of US$120 million and a 7-year term loan of $56 million and is the first co-financing project between IFC and JICA in the agri-sector.
The company intends to use the proceeds to finance additional procurement of specific agri-commodities from smallholder farmers in Vietnam, Indonesia, Timor-Leste, Papua New Guinea and Uganda.
“This new investment in Olam will help smallholder farmers in developing countries reach global markets and boost their incomes,” said Tomasz Telma, IFC Senior Director, Manufacturing, Agribusiness & Services
“We also anticipate that together with Olam and JICA, IFC will help promote greater inclusiveness through better use of digital technologies as well as capacity-building at farmer level.”
Olam also unveiled that the funds will support expansion of its cocoa processing facility in Indonesia.
“Olam has been actively working to build a global, sustainable agri-business, and in Indonesia considerable efforts have been made to tackle environmental and social issues,” commented Junichi Yamada, Senior Vice President of JICA.
Yamada said that the Corporation expect sustainable cacao business in Indonesia will be expanded through the loan facility and ultimately provide stability to smallholder farmers.
“I am delighted to announce this is the first co-finance project with IFC in the agri-sector. JICA would like to cooperate with IFC to further expand agri-sector support,” Yamada added.
“I am delighted to announce the completion of this facility that provides support, stability and reliable market access to smallholder farmers, particularly in these challenging times,” said N Muthukumar, MD and Group CFO of Olam.
Muthukumar noted that the facility also aligns with Olam’s core purpose of re-imagining global agriculture and food systems as well as IFC’s and JICA’s mandate of enabling inclusive economic growth with environmental stewardship and regional integration.
“I would like to thank IFC and JICA for their long-standing support and commitment to Olam,” he said.