IFC lends $26m to local palm oil companies
IFC lends $26m to local palm oil companies
The Jakarta Post, Jakarta
The International Finance Corporation (IFC), the investment arm
of the World Bank, has agreed to provide US$26 million in loans
to two Indonesian palm oil plantation companies.
The IFC, in a statement released Friday, said $14 million
would be lent to Verdaine Investment Limited and $12 million to
PT Sahabat Mewah Makmur, a 12,000-hectare oil palm plantation
acquired by Verdaine in February 2003.
Verdaine was created in June 2000 with $100 million in
committed equity from Austindo Nusantara Jaya, Olympus Capital
Holdings Asia and JP Morgan Partners Asia. Verdaine aims to
acquire, rehabilitate and manage 40,000 to 50,000 hectares of
palm oil plantations.
Verdaine's primary acquisition targets are plantations in
Indonesia with potential for strong cash flow and further growth
prospects if rehabilitated.
"IFC believes that the fundamentals of the palm oil industry
in Indonesia are sound. In these transactions we are able to work
with a strong and reliable operator to facilitate its growth
across Indonesia," said Jean-Paul Pinard, IFC director of
agribusiness in the release.
Verdaine director Kelly Knight said that IFC was the right
partner for Verdaine because they both were committed to good
corporate governance, sustainable development and the creation of
employment.
"The palm oil business is one of Indonesia's most important
generators of employment and dollar export earnings," she said.
"It is a business where Indonesia has strong competitive
advantage but where there is a great need for improvement in
corporate governance."
Indonesia exported $1.97 billion worth of palm oil and kernels
last year, the country's second-largest export commodity after
exports of pulp and paper, according to government statistics.
Indonesia's production of crude palm oil may increase 6.5
percent to 9.6 million tons this year, compared with 9 million
tons the year before, the country's Palm Oil Producers
Association
said in January. Palm oil exports may increase 9 percent this
year to 6.1 million as output rises, the association said.
IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets,
helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and
businesses.
From its founding in 1956 through financial year 2002, IFC has
committed more than $34 billion of its own funds and arranged $21
billion in syndications for 2,825 companies in 140 developing
countries.