Singapore, April 7, 2022— Singapore's private sector will play a critical role in improving the livelihoods of thousands of smallholder farmers and lowering greenhouse gas (GHG) emissions in Nigeria, following the construction of a new warehouse and processing complex for agricultural commodities in the country.
IFC, the largest global development institution focused on the private sector in emerging markets, has agreed to issue US$18 million in debt financing to Robust International Pte. Limited (Robust), a Singapore-based agricultural company with operations across the Asia-Pacific region and sub-Saharan Africa. Founded in 2006, Robust primarily trades in specialty crops such as cashews, sesame, ginger, and gum arabic, among others.
The company will use proceeds from the loan to build modern warehouses and processing facilities in northern Nigeria, and the financing is one of the first investments in modern secondary sesame processing in that region. The project will improve smallholder farmers' access to modern storage and processing facilities, while allowing Robust to increase direct sourcing volumes with smallholder farmers. The storage facilities will relieve farmers of the need to store their own crops in often poor conditions, which leads to high post-harvest losses and unnecessary GHG emissions related to spoiled food, which account for around 5 percent of Nigeria's total GHG emissions.
The financing package consists of a senior secured loan of up to US$9 million from IFC's own account, as well as a concessional loan of up to US$9 million from IFC acting as the implementing entity of the International Development Association's Private Sector Window.
"Robust is committed to empowering farmers and enriching local communities and has followed and encouraged sustainable farming practices," said Naarayan Raaghavan, Chairman and Managing Director of Robust. "We are very pleased to work with IFC on this project, which will provide employment opportunities to the local community while significantly contributing to Nigeria's economic growth and value addition in the country's supply chain. The project also involves a deeper engagement with smallholder farmers by supporting them in the adoption of sustainable farming methodologies while encouraging and training them to work towards creating awareness on matters pertaining to environmental preservation, as well as contributing to their overall economic wellbeing."
Agribusiness is a significant contributor to Nigeria's economy, providing more than half of its jobs and contributing over 35 percent of its GDP. The sector provides a route out of poverty for many smallholder farmers in the north of the country, which is marred by conflict and where poverty levels are five times higher than in the south.
"We are delighted to partner with Robust in its next phase of growth," said Kalim M. Shah, Senior Country Manager for Nigeria at IFC. "Modernizing agribusiness and improving the sector's productivity is crucial to supporting economic development and inclusion in Nigeria, particularly at a time when pandemic-related disruptions and geopolitical tensions are increasing volatility in the sector and impacting food security, further pushing smallholder farmers into poverty."
"IFC has a successful track record of supporting Singapore-based companies with ambitions to build their businesses in emerging markets," said Nicolas Marquier, Country Manager for Singapore, Malaysia, and Brunei Darussalam at IFC. "Our partnership with Robust is a great example of how Singapore's private sector can leverage IFC's innovative financing structures and global expertise to expand in developing countries, helping to alleviate poverty and promote shared prosperity globally."
As part of the agreement, IFC will support Robust in strengthening its risk management capabilities, improving its environmental and social practices, and smallholder-farmer sourcing and engagement activities, among other areas.
"Through partnerships, our Singapore trading companies continue to make inroads into new geographies," said Lee Pak Sing, Assistant Chief Executive Officer of Enterprise Singapore. "We are delighted that Robust, a homegrown agricultural commodities company, can collaborate with IFC to serve the Nigerian market. This will further strengthen Singapore's participation in global trade flows and deepen and widen our trade with the rest of the world."
IFC has a successful track record of supporting Singapore-based companies with ambitions to expand in emerging markets using innovative structures, local currency financing solutions, access to capital markets and our unparalleled knowledge gained from more than six decades creating markets and opportunities around the world. We have provided over US$5 billion in commitments to Singaporean clients over the last decade to support their expansion into emerging markets globally.
IFC's partnership with Robust underscores IFC's growing commitment to Nigeria, with a US$2 billion active investment portfolio across sectors including agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.
About Robust International
Robust - a part of the exclusive group of Enterprise 50 companies in Singapore - provides Farm-to-Fork solutions in the essential food commodities segment. The corporate values of Commitment, Integrity and Excellence transcend all borders and are filtered to microscopic levels of the organization. Robust has its processing facilities and presence in over 25 countries today across the globe while employing over 300 employees. The organization plays an active and important role in the essential food supply chain. Robust has ambitious plans to further enhance and expand its processing facilities in the coming years further actively contributing to the economic growth of the nations while enriching local communities and farmers. Robust is committed to environmental sustainability practices, engaging with various development institutions such as IFC in order to establish and maintain connections with smallholder farmers and communities to improve their livelihoods. The vision of the organization is to have a significant impact on farming practices in order to reduce irrigation costs and increase yield through simple practices that can have wide reaching effects throughout the supply chain.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
About the IDA Private Sector Window
As part of the 19th replenishment of the International Development Association (IDA), the World Bank Group is continuing the IDA Private Sector Window (PSW) created under IDA18 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA's objectives and the World Bank Group's twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution and the World Bank Group's other tools and approaches are insufficient. For more information, visit: http://ida.worldbank.org/psw
