WASHINGTON, D.C., Jan. 6—The International Finance Corporation (IFC) today signed an agreement to provide US$18 million in loans to Engro Chemical Pakistan Limited (Engro) for a US$59 million project, which will enable Engro to retrofit its gas-based ammonia urea plant in order to improve energy efficiency, increase capacity, and reduce emissions. This investment will allow the company to conserve valuable natural gas used in the production of urea fertilizer, a critical input for agricultural productivity and the country’s economy.
Engro is Pakistan’s second largest producer of urea with a 21% share of the local market. The company’s original manufacturing plant, with a capacity of 268,000 metric tonnes per year (mt/yr) of urea, was built in the 1960s. In 1991, IFC helped Engro finance an expansion of the plant to 600,000 mt/yr of urea. Engro has since completed a further debottlenecking to 750,000 mt/yr. The retrofit project will boost the plant’s capacity to 850,000 mt/yr. Project completion is expected in April 1998.
Mr. Jean-Philippe Halphen, Director of IFC’s Chemicals, Petrochemicals, and Fertilizers Department said, “IFC is delighted to assist in the continued growth of Engro. The retrofit project is a perfect combination of financial and economic viability, energy saving and environmental improvement. It will make a significant contribution to the company’s long-term competitiveness as a supplier of urea fertilizer to the Pakistani market.”
“Engro appreciates IFC support for its continued modernisation and expansion program to meet growing fertilizer requirements in the country. The retrofit project is a further step to reach the company’s eventual goal to produce 1.1 million mt/yr of urea”, said Mr. Shaukat Mirza, Engro President and CEO.
IFC’s financing will consist of a loan of US$9 million for its own account and a syndicated loan of US$9 million for the account of participants.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.