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WASHINGTON, D.C., Jan. 24 -- The International Finance Corporation (IFC) today signed its first investment agreement in China's agribusiness sector to provide approximately US$19 million in financing to Nantong Wangfu Special Aquatic Products Co., Ltd. The financing will help to implement an eel farming and processing project in Nantong, in the Jiangsu province of China.
IFC will provide loans of JPY1600 million, of which up to JPY900 million will be for the account of participants. IFC will also make an equity investment of up to JPY300 million for about 21 percent of the equity interest in the company.
The project includes an eel farm with an annual production capacity of 3,000 tonnes and a processing plant. The total project cost is US$30 million. IFC also provided advice on project design, specifically in the areas of effluent treatment and use of water resources, an important input for the project.
The company is owned by the Nissei group of Japan and Nankang Eel Farm Co. Ltd. of China, which is part of the Nankang Township group of companies. Nissei, which specializes in eel production and marketing, is a privately held Japanese company which has been active in the Chinese eel industry for over a decade and has established other joint venture eel operations in China based on advanced technology.
Nearly all the processed product is likely to be exported to Japan, which consumes over 90 percent of the East Asian supply and is the largest market for eels. Besides supermarket chains, Nissei is developing direct retail outlets, including a fast food restaurant chain.
"By emphasizing the evolution of agriculture towards production of high-valued animal products and the significance of efficient logistics and marketing systems to link producers to urban and foreign markets, the project provides a model of an integrated operation, relevant not only to aquaculture but also to poultry and livestock operations in China," said Mr. Karl Voltaire, Director of IFC's Agribusiness Department, when he signed the agreement.
IFC is the private sector arm of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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