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Singapore-based agribusiness to expand to Nigeria with IFC facility

07 Apr 2022
Financial Nigeria

Summary

Robust primarily trades in specialty crops such as cashews, sesame, ginger, and gum arabic, among others.

Senior Country Manager for Nigeria at IFC Kalim M. Shah

Robust International Pte. Limited (Robust), a Singapore-based agricultural company with operations across the Asia-Pacific region and sub-Saharan Africa, has signed a debt financing agreement of $18 million with International Finance Corporation (IFC), the private sector lending arm of World Bank Group, to expand its operations to Nigeria.

Founded in 2006, Robust primarily trades in specialty crops such as cashews, sesame, ginger, and gum arabic, among others. IFC said in a statement it sent to Financial Nigeria today that the Singapore's private sector company 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.

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 $9 million from IFC's own account, as well as a concessional loan of up to $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."

Agriculture 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."

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.

IFC has a US$2 billion active investment portfolio in Nigeria across sectors including agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.



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