IFC may extend US$120 million loan to Temasek-backed Olam International

Mon May 7, 2018 - 6:55am UTC

4/5/2018 – International Finance Corporation (IFC), a member of the World Bank Group, has proposed a debt investment of up to US$120 million in Singapore-based Olam International Limited.

The proposed investment will be in terms of an unsecured, corporate loan in order to help the company finance its procurement activities, farmer financing as well as the market access to countries like Africa, Southeast Asia, and the Pacific.

Listed on the Singapore Exchange Board, Olam is engaged in agri-business, handling sourcing, processing, packaging, and merchandising of agricultural products and food ingredients across 66 countries.

Olam currently ranks among the top 30 largest primary-listed companies in Singapore in terms of market capitalization. Its main backers are Temasek Holdings (57.36 percent) and Mitsubishi Corporation Japan (17.4 percent).

“With the proposed financing, IFC will support Olam’s efforts to create markets for smallholder farmers in IDA countries, most of whom are unbanked or disconnected from financial systems,” said a spokesperson from IFC.

The financing will also impact Olam’s supply chain financing for sourcing of crops primarily grown by smallholder farmers in several countries, including FCS/IDA Timor Leste, Papua New Guinea, Uganda. Vietnam, and Indonesia.

Moreover, smallholder farmers supplying Olam will also benefit from reliable access to market, as well as finance and extension services, with positive implications on yield enhancement, optimal inputs usage and increased income.

These farmers may also participate in the Olam Livelihood Charter, the relevant certifications, and Olam’s digital farmer platform, to obtain better prices for products meeting certification requirements and also to ensure the sustainability of the supply chains.

“Olam’s work with farmers also has the potential to generate more extensive market impacts by influencing the way other traders and integrators manage similar issues of competitiveness and sustainability,” IFC explained.

In related news, Olam has also recently secured a US$163 million loan from Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA).

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