The International Finance Corporation has provided a $200 million financing package to Kingenta Ecological Engineering Group, a Chinese specialty fertilizer manufacturer, the World Bank affiliate announced Tuesday.
Founded in 1998, Kingenta offers a variety of specialty fertilizers including compound, water soluble and slow-release fertilizers. Publicly-listed on the Shenzhen stock exchange since 2010, the company exports its fertilizers in South Korea, Japan, Australia and Malaysia.
The IFC financing will come in the form of a $70 million equity investment in the company, a $75 million senior loan and $55 million from the IFC’s Managed Co-financing Portfolio Platform. In addition, the IFC said it was also working to secure an additional $80 million in loans for Kingenta from other multilateral lenders.
The capital will support the Kingfarm Cooperative, a collection of hundreds of service centers planned to be established throughout China to provide access to Kingenta’s fertilizers, as well as training and high-quality seeds.
Vivek Pathak, IFC director for east Asia and the Pacific, called Kingenta’s distribution model innovative in the statement and said that its use would encourage “inclusive growth”.
“Kingfarm Cooperative – as China’s first modern agricultural service platform as well as a group dedicated to farmers – is committed to building an integrated agricultural value chain,” Kingfarm chairman Li Jinguo said in a statement. “We will consolidate resources and different channels in order to deliver comprehensive services for 50 million farmers in China.”
The IFC’s support for Kingenta is part of a coordinated effort with the Chinese government to phase-out inefficient fertilizers in order to reduce pollution and mitigate climate change. Last week, China’s Ministry of Agriculture launched a program to provide support to farmers switching from chemical to organic fertilizers in 100 specific counties and districts, part of a push to cut chemical fertilizer use 20 percent by 2020 that was announced earlier this year.