IFC’s investment will be used by Adecoagro Argentine subsidiaries, including Adeco Agropecuaria, Pilaga and L3N
The World Bank Group member International Finance Corporation (IFC) has granted $100m loan to Argentina-based agribusiness company Adecoagro to help expand the dairy sector in the country.
The investment will enable to frame a sustainable approach to better develop the dairy industry, a crucial component of the agribusiness and a key economic element of the country that accounts for 63% of its total exports.
Adecoagro is a major producer of food and renewable energy
Adecoagro, a major producer of food and renewable energy, has operations in Argentina, Brazil, and Uruguay. IFC’s investment will be used by Adecoagro Argentine subsidiaries, including Adeco Agropecuaria, Pilaga and L3N.
The $100m financing package is comprised of a $57.25m loan on IFC’s own account, including a $17.8m IFC Green Loan tranche that will be used for wastewater treatment and climate-friendly projects.
The financing package is said to represent the first IFC Green Loan in the real sector in Argentina and the first IFC Green Loan in the dairy and animal protein sector across the globe.
The remaining $42.75m loan will be provided via the IFC Managed Co-Lending Portfolio Programme (MCPP), a platform that enables institutional investors to passively participate in IFC’s future loan portfolio.
IFC stated that the tenor for both tranches is eight years, including a two-year grace period.
The loan will help Adecoagro to offer long-term financing for the acquisition and efficiency improvement of two dairy processing facilities, as well as the construction of two dairy free-stalls to expand milk production.
IFC will also offer technical advice to Adecoagro on enhancing resource efficiency in their operations.
IFC Argentina, Chile, Paraguay and Uruguay country manager David Tinel said: “Through this investment, IFC will contribute to strengthening the competitiveness of Argentina’s dairy sector by providing access to long-term financing to Adecoagro at a time when funding options are limited.”
Adecoagro chief sustainability officer Alejandro López Moriena said: “The IFC Green Loan confirms Adecoagro’s commitment to sustainable agribusiness production under world-class standards, and will allow it to expand its production sustainably at a time of global uncertainty.”
In April this year, IFC provided Ukrainian small farmers with access to $1bn of working capital financing.