IFC disburses $3.8 million to Probiotech to accelerate post-earthquake recovery, boost farmer incomes
IFC – a member of the World Bank Group – and Private Sector Window of the Global Agriculture and Food Security Programme have disbursed $3.8 million to Probiotech Industries, a commitment announced last year, reaffirming IFC’s and Nepali private sector’s commitment to support the country as it rebuilds itself after the devastating earthquake.
This is IFC’s first investment in Nepal’s agribusiness sector. Probiotech is one of the early organised poultry feed manufacturers that set up the first pellet feed mill in the country. The company will use the funding to finance manufacturing capacity for high-margin value-added products such as soya flour nuggets, and refined oil, and streamline the food supply chain.
“In the backdrop of the earthquake that devastated the Himalayan country weeks ago, this financing package reaffirms that investors are not shying away from Nepal,” said managing director of Probiotech Anand Bagaria. "Through IFC’s investment and advice, we seek to rebuild this important sector and adopt best practices for production efficiency, environmental and social standards, and to upgrade technology," he added.
The financing will also enable Probiotech to expand its procurement and distribution networks. Currently, the company distributes its products through 100 registered dealers and 500 sub-dealers across 70 districts of Nepal. As a result the company will increase sourcing from over 8,000 farmers and food suppliers, improving food safety standards, and boosting their incomes.
"The project will increase the supply of quality soy-based protein, especially for the low-income people of Nepal where malnutrition is prevalent, and promote food security," said head of Industry, Manufacturing, Agribusiness and Services, IFC Asia Pacific Patrick Leahy.
"IFC remains committed to supporting Nepal as it rebuilds its agribusiness sector that employs 70 per cent of the workforce,” said IFC’s director for Asia-Pacific Vivek Pathak. "This investment will help create jobs, both at the plant and farm level, and have a direct positive impact on farmers’ incomes."
As of March 2015, IFC has a committed portfolio of $3.3 billion across the agricultural value chain globally. IFC‘s agribusiness strategy aims to promote inclusive growth and environmental and social sustainability in agricultural supply chains. A past advisory project of IFC helped small poultry farmers in Nepal make their businesses more productive through better farm management practices that reduce costs, and improve poultry quality.
Likewise, the Global Agriculture and Food Security Programme is a worldwide effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The programme targets countries with the highest rates of poverty and hunger. The public sector window helps governments with national agriculture and food security plans. The private sector window, managed by IFC, provides long- and short-term loans, credit guarantees, and equity to private sector companies to improve productivity, deepen farmers' links to markets, and increase capacity and technical skills.
Likewise, IFC – a member of the World Bank Group – is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In the fiscal year 2014, IFC provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development.