“This deal is the first large scale cross-border transaction we’ve done for IFC in sub-Saharan Africa since our panel re-appointment.”
GARETH HODDER
JOHANNESBURG-BASED PARTNER

Nigeria’s economy received a welcome boost following the recent opening of the largest single-train urea plant in the world at Eleme, Rivers State.

It’s no exaggeration to say the opening of the $2.2 billion plant has had a transformational impact on the local community and further afield, providing employment in a country where 60 per cent of the 200 million-strong population is under the age of 25.

London-based Partner Mukund Dhar explains: “Nigeria has some of the largest gas reserves in the world, so should be naturally suited to fertilizer production. However, Nigeria continues to flare large amounts of gas (flaring is the disposal of natural gas produced during petroleum production), so monetizing this waste gas for industrial production is hugely significant.

“Since the Eleme plant opened, imports of urea fertilizer have dropped significantly while exports of urea have risen 300 per cent. Use of urea in Nigeria has also increased and this should have a positive knock-on effect for local agriculture and self-sufficiency as the country currently imports a lot of food.”

The Firm’s involvement in the development of the Eleme plant has included advising the lenders to the main sponsor Indorama on both phases of the deal. Phase one was led by Partners Jason Kerr and Matt Wood and included the $1.2 billion financing of the plant’s construction, while phase two involved a further $1 billion investment aimed at doubling the site’s capacity.

For phase 2, we advised the lenders on all aspects of the project, including the purchase of gas, construction and technology licenses, to help them ensure the project was commercially viable. Johannesburg-based Partner Gareth Hodder says: “The lender group included a syndicate of 20 financial institutions, led by one of the Firm’s existing key clients (and an important client for us in Johannesburg), the International Finance Corporation (IFC).

“The group also included many development finance institutions (DFIs), such as the African Development Bank, Emerging African Infrastructures Fund and the European Investment Bank.

“The number of DFIs involved was particularly exciting from our point of view, because it has allowed us to build relationships with clients who play a significant role in development projects across Africa and elsewhere.”

The Eleme project also represents a textbook example of collaboration across our offices and practices, including involvement from teams in Abu Dhabi, Johannesburg, Dubai, London and New York.

Gareth says: “This deal is the first large scale cross-border transaction we’ve done for IFC in sub-Saharan Africa since our panel re-appointment in 2017, so it’s a landmark deal for us, but our experience working with IFC and appreciation of the sensitivities and priorities of DFI clients stood us in good stead.

“Even though this is a commercial project, it has clearly made a much wider, long-lasting social, economic and environmental impact.”
MUKUND DHAR
LONDON-BASED PARTNER

“The matter involved working with several key clients across multiple practices, so it has really showcased our ability to provide a seamless cross-border, cross-practice service. It’s also strengthened our already strong position in the petrochemicals industry and reinforces our credentials in Nigeria and across Africa.”

The facility is also having a hugely positive effect on the local community and Nigerian economy.

Mukund explains: “Even though this is a commercial project, it has clearly made a much wider, long-lasting social, economic and environmental impact.

“It has created vital employment, increased exports and lowered imports. It monetizes gas that would otherwise have been a hazard. There is a real sense of satisfaction in being involved in something that will positively impact so many people.”