Beijing, July 18, 2017
—IFC, a member of the World Bank Group, has committed $200 million in financing to China’s leading specialty fertilizer manufacturer, Kingenta Ecological Engineering Group Co. Ltd. With this funding, it aims to expand an innovative agricultural service platform Kingfarm Cooperative, which has the potential to boost crop yield and income for millions of Chinese farmers. The project will also help curb usage of inefficient fertilizers and promote climate-smart agricultural practices in China.
IFC’s financing package includes $70 million in equity, $75 million of IFC senior loan and $55 million from IFC’s Managed Co-Financing Portfolio Program. IFC is also working on mobilizing approximately $80 million from other multilateral lenders.
Kingenta plans to set up hundreds of new crop production service centers across China in the next five years. These centers will ensure that farmers have access to its high-efficiency fertilizer, other high-quality inputs such as seeds, and training. Kingenta’s fertilizer is expected to increase crop yield by 10 to 40 percent with the application of the same amount of conventional fertilizer — enabling higher productivity and less environmental impact.
Kingfarm Cooperative Chairman Li Jiguo said, “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. We will consolidate resources and different channels in order to deliver comprehensive services for 50 million farmers in China.”
IFC Director for East Asia and the Pacific, Vivek Pathak, said: “IFC works with Kingenta to demonstrate an innovative model that will provide improved services to farmers and stimulate inclusive growth.”
IFC Director for Manufacturing, Agribusiness, and Services, Sérgio Pimenta, said: “Kingenta’s innovative distribution strategy offers a sustainable solution to increasing farm productivity and encouraging the adoption of climate-smart farming techniques and technology.”
China is working with the World Bank Group to make its agriculture industry more competitive and mitigate the effects of food production on the environment. More efficient, specialty fertilizers reduce soil containment and waterway pollution. However, such fertilizers represent only about 30 percent of the annual fertilizer usage in China, compared with 50 to 60 percent in other large food-producing countries, such as Brazil and Thailand. Encouraging the phase-out of overused, inefficient fertilizers is part of the Chinese government’s strategy to reduce pollution and mitigate climate change.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY16, we delivered a record $19 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org
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