Singapore’s Olam receives $176 mil. in loans from JICA, IFC to work with small farmers
SINGAPORE, NNA – Singaporean agricultural business operator Olam International Ltd. has received $176 million in loans from the Japan International Cooperation Agency and the International Finance Corp. to help farming households contribute commercial supplies.
Olam will use the money to finance projects that buy agricultural products from small-scale households in Vietnam, Indonesia, East Timor, Papua New Guinea and Uganda. Some of the loan money will expand Olam’s own cacao processing facility in Indonesia, the company said Wednesday.
“I am delighted to announce the completion of this facility that provides support, stability and reliable market access to smallholder farmers, particularly in these challenging times,” Olam International CEO Neelamani Muthukumar said in a statement.
The multi-tranche financing consists of a five-year loan of $120 million and a seven-year loan of $56 million.
The loans mark the first time that JICA, an agency that coordinates Japanese official development assistance, and the World Bank affiliate IFC, have jointly offered loans in the agriculture sector, JICA senior vice president Junichi Yamada said in Olam’s statement.
“It’s expected that Olam’s utilization of the loans to expand its cacao business in Indonesia in a sustainable manner will help stabilize the management of smaller-scale local farming households,” Yamada added.
Olam used $163 million in loans secured in 2018 from JICA and the Asian Development Bank to finance the expansion of its coffee business, such as investment and working capitals, in Vietnam, Indonesia, East Timor and Papua New Guinea,.
Japanese trading house Mitsubishi Corp. signed a business agreement alliance with Olam International and obtained a 20 percent stake in the firm in 2015.