Indorama Eleme Fertilizer-III

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The Indorama Corporation (Indorama or the Group), a Singapore-based holding company with a global presence in petrochemical and fiber industries, is seeking to expand its production facilities in Nigeria. Indorama has been partnering with the International Finance Corporation (IFC) in Nigeria since 2007 on several projects. Operating under Indorama Eleme Fertilizer and Chemicals Limited (IEFCL), these include the creation of the 1.4 Million Metric Tons Per Annum (MMTPA) urea fertilizer facility (Line 1), the subsequent expansion to 2.8 MMTPA (Line 2), a Feed Conditioning Unit (FCU), and a plant debottlenecking project, within the same production complex in Port Harcourt, Nigeria. For more details on these past projects, refer to the public disclosure documents available on IFC's project disclosure website under project numbers: #30967, #38096, #40420, #42187, and #44761.Indorama is seeking to develop a third urea fertilizer line, known as Line 3, at the same site in Port Harcourt, Nigeria. Line 3 is designed to build upon the technologies and knowledge gained from the development and operation of Line 1 and Line 2, featuring similar technology and capacity. The creation of Line 3 will raise the present urea production capacity from 2.8 MMTPA to 4.2 MMTPA. The Line 3 plant will contain a 2,300 Metric Tons Per Day (MTPD) capacity for ammonia, a 4,000 MTPD urea facility, steam, cooling tower, water treatment, product handling, power, nitrogen, plant air and instrument air, passive and active firefighting systems, along with product storage and material handling facilities.In addition, the expansion of production facilities will result in an estimated surplus of 400 MTPD of ammonia. To facilitate exports of fertilizer and ammonia, the project also encompasses the construction of a dedicated jetty, named Line 3 Jetty. Positioned approximately 20 kilometers from the production site, at the Onne Port Complex, this planned jetty will expand Indorama’s existing export infrastructure capacity by providing necessary storage and export capabilities for the surplus ammonia and bulk urea produced by Line 3.The Indorama complex, the site of the Line 3 implementation, features state-of-the-art facilities such as a captive gas fired power unit, utilities, an effluent treatment plant, storage tanks, bagging, a warehouse, and other supporting facilities. The project site, located within a wider industrial complex, neighbors six communities, comprising a population of around 62,000 residents.The projected construction cost of Line 3 and the Line 3 Jetty is US$1.250 billion. The proposed construction period is three years for Line 3, and two years for the jetty. IFC is contemplating an investment package of up to US$1.250 billion, consisting of a up to US$285 million A Loan, up to US$870 million in mobilization of B/parallel loans from commercial banks/development finance institutions, and IFC B2 loans provided under IFC's Managed Co-Lending Portfolio Program (MCPP) of up to US$95 million.Indorama has effectively implemented the Environmental and Social Action Plans (ESAPs) associated with IFC's prior investments, creating robust environmental and social (E&S) management systems for its operations, and cultivating the organizational capacity to monitor and continuously improve its E&S performance. The operation of IEFCL Line 1, the construction and commissioning of IEFCL Line 2 and related facilities, and the construction and operation of FCU II are all under the purview of a third-party independent monitoring consultancy commissioned by lenders. The ongoing operation of IEFCL Line 1 and the comprehensive implementation of the ESAP and operational E&S management plans for IEFCL Line 2 and FCU II is aligned with Good International Industry Practice (GIIP), and Indorama’s E&S performance to date has been satisfactory. In April 2018, the Office of the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for projects supported by IFC, received a complaint from a group of employees at IEFCL. The complaint pertained to allegations of noncompliance with certain elements of IFC's Performance Standards. More details about the complaint and the subsequent assessment report from the CAO can be accessed at the following link: https://www.cao-ombudsman.org/cases/nigeria-eleme-fertilizer-ii-01port-harcourt. Following the conclusion of the CAO's Compliance unit investigation, IFC formulated a Management Action Plan (MAP). This plan included the appointment of an independent third-party consultant to perform a labor review of the plant in June 2022, resulting in recommended improvements to the existing grievance mechanism. IEFCL is implementing the agreed MAP and IFC, together with the consultant, is currently assessing the progress of implementation of agreed corrective actions. The progress of the implementation of agreed actions has been satisfactory and IEFCL has demonstrated a commitment to address the issues raised in the complaint in line with PS 2 requirements.