The International Finance Corporation has issued an $18 million loan to Terra and African Milling Company Congo (AMCC), an integrated maize farm and maize flour milling operation in the Democratic Republic of Congo (DRC). The deal was signed in the wake of a renewed commitment by the IFC to double its investment into African agriculture to $2 billion by 2018.
IFC announced this increase earlier this month and will involve a mix of equity and debt financings – there is specific split, according to Samuel Dzotefe, IFC’s Head of Agribusiness for sub Saharan Africa.
“IFC’s investments are based on a company’s needs and business goals,” he told Agri Investor. “In the case of this particular investment, both IFC and Terra found that a loan would be more appropriate for the company’s financing need. We provided an eight year loan to meet the longer term financing required for agricultural development.”
The loan will finance the company’s expansion of its maize production facility, which is a high demand food staple in Katanga, DRC, where total demand is estimated at approximately one million tonnes each year, according to Oumar Seydi, IFC Director for Eastern and Southern Africa.
“IFC firmly supports companies like Terra and AMCC, which can multiply food production and create jobs to reduce poverty,” he wrote in a press release. “As DRC continues to rebuild after years of conflict, foreign direct investment will be most effective if it can expand beyond the mining sector to help diversify the country’s economy.
“IFC and Terra would like to send a strong signal to international investors that agribusiness provides excellent business opportunities in DRC, and has the power to transform local lives.”
IFC’s agribusiness portfolio was valued at $6 billion on a global basis as at December 2013.