IFC to give $32.5 million to ensure food security in Bangladesh

Shining BD Desk || Shining BD

Published: 12/13/2022 6:06:32 AM

To improve food security in Bangladesh at a time of rising commodity prices amid a global shortfall of staple crops, the International Finance Corporation (IFC) is providing a $32.5 million loan to Singapore-based agricultural commodity-trading company Agrocorp International Pte Ltd, which is a leading supplier of wheat and pulses to Bangladesh.

According to IFC, the largest global development institution which is focused on the private sector in emerging markets, is providing an eight-year financing package consisting of a senior secured loan of up to $18 million as well as a concessional loan of $14.5 million from the International Development Association's Private Sector Window Blended Finance Facility.

 At a time when trade financing has been constrained globally amid price instability, the investment will allow Agrocorp to buy and deliver millions of tonnes of wheat and pulses from Australia and Canada to Bangladesh, providing safe, nutritious, and calorie-rich staples to the country at a time of heightened food insecurity. 

These staples are sold to millers and food processors, which depend on them to produce basic foods for the Bangladeshi population, a media statement by IFC said.

“Agrocorp plays an important role in addressing food security in Asia, which has become more vital with all the recent shocks in global food-supply chains,” said Vijay Iyengar, chairman and managing director, Agrocorp International.

“We are delighted to be partnering with IFC for this loan, which will allow us to scale up our work to provide an even stronger platform to secure food supplies for emerging markets such as Bangladesh,” he said.

“We are pleased that IFC is able to provide financial support for Agrocorp to reinforce its position in global food supply chains, and in this instance to serve the markets in Bangladesh during these challenging times”, said Geoffrey Yeo, assistant chief executive officer, Enterprise Singapore.

“We are glad that Singapore's role as a global trade hub has enabled companies like Agrocorp to play an important role in managing global food supplies” he said.

The war in Ukraine has exacerbated food inflation globally, sparked high and volatile energy and fertilizer prices and restrictive trade policies, and has also worsened supply-chain disruptions caused by the Covid-19 pandemic.

Wheat has been particularly affected, as Ukraine and Russia have traditionally accounted for over a quarter of the global-trade volumes.

In addition, about a quarter of Bangladesh's population of 165 million people face food insecurity due to the impacts of climate change and the rising frequency of natural hazards, such as flooding caused by monsoon rains.

This convergence of crises threatens to drive more people into extreme poverty, magnify hunger and malnutrition, and erase hard-won development gains in the country.

“This investment ensures the supply of essential raw materials to food producers and processors in Bangladesh, allowing the availability of safe, nutritious, and calorie-rich staple foods to be available”, said Hector Gomez Ang, regional director for South Asia, IFC. “

The IFC investment is in line with a new $6 billion Global Food Security Platform (GFSP), which aims to mobilise private investment to address the deterioration in food security, particularly in the world's most vulnerable countries.

Since 2010, IFC has invested over $3.6 billion to help private sector growth in Bangladesh.



Source: UNB 

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