European Syndicate Provides $49M to Feronia for Palm Oil Operations
A syndicate of European lenders including four Development Finance Institutions (DFIs) have entered into a secured term facility agreement for up to $49 million with Feronia subsidiary Plantations et Huileries du Congo SA (PHC).
Deutsche Investitions - und Entwicklungsgesellschaft mbH ("DEG"), is the lead arranger and agent for the syndicate, and has agreed to provide $16.5 million of the total facility. The Dutch development bank, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. ("FMO"), has agreed to provide $16.5 million, the Belgian Investment Company for Developing Countries ("BIO"), has agreed to provide $11 million, and the Emerging Africa Infrastructure Fund ("EAIF"), a facility of the Private Infrastructure Development Group, has agreed to provide $5 million of the total facility, according to a Feronia press release.
The funds will be used to finance the purchase of new equipment, replanting, and to satisfy expenditures due to fertilizer and environmental and social governance associated with the upgrading and rehabilitation of PHC’s three palm oil plantations in the Democratic Republic of Congo.
"This is a landmark transaction for Feronia, PHC and the entire agriculture industry in the DRC, said Feronia chairman, Ravi Sood in a company statement. “In rebuilding a 104-year old business, we are playing a key role in driving sustainable growth in the communities in which we operate and providing an essential product across the DRC. The Lenders' involvement is a huge positive for all stakeholders and highlights the promise of agriculture to create sustainable employment and alleviate poverty in the DRC.”
Feronia has been in the palm oil business for 104 years and is working toward gaining certification by the Roundtable for Sustainable Palm Oil (RSPO) through implementing standards for environmental and social sustainability set by the IFC/World Bank. Feronia’s PHC subsidiary has three plantations located in Lokutu, Yaligimba, and Boteka and also controls a rice farming and processing operation.