IFC Helps India Expand Agri-warehousing Infrastructure to Reduce Wastage, Promote Food Security
New Delhi, India, May 31, 2011—IFC, a member of the World Bank Group, and partners are investing in Indian local agri-warehousing company National Collateral Management Services Ltd to help build modern warehouses for efficient storage of agricultural commodities that will help reduce waste of food grains and promote food security.
IFC, Rabobank-sponsored India Agri Business Fund, and public sector company Indian Farmers’ Fertilizer Cooperative Ltd. will each provide equity investments of approximately $ 6 million, $ 7.5 million and $ 5 million respectively(INR 275 million, INR 345 million and INR 237.5 million respectively). The project will expand state-of-the-art storage facilities across India and will also help manage volatility of food prices in India.
“We offer modern, scientific, and IT-enabled storage and preservation services for agricultural commodities,” said Sanjay Kaul, Managing Director and CEO, National Collateral Management Services Ltd. “We plan to deploy funds over the next two years to create our own network of warehouses in over 40 locations across India.”
The company’s existing investors, India’s National Commodity and Derivative Exchange Ltd, Karur Vysya Bank, and the Haryana State Co-operative Supply and Marketing Federation Ltd., will collectively commit an additional $3.5 million (INR 160 million) to support the expansion.
“This investment sends a strong signal to the market on the viability of private solutions to expand critical agriculture-related infrastructure, said Anita George, IFC Director for Infrastructure in Asia. “By reducing food waste and minimizing price volatility, the project will benefit Indian farmers and help stabilize their income levels.”
In India, huge quantities of food items are wasted annually due to inadequate agricultural infrastructure, including storage and transportation facilities. Storage and warehouses are owned predominantly by government enterprises in India. The private sector can play an active role in developing additional storage capacity for food and grains, and this project is a testimony to that.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010.