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EAIF is US$5 million contributor to syndicated US$49 million facility for DRC firm PHC

The Emerging Africa Infrastructure Fund (EAIF) is to lend US$5m to help finance the rehabilitation, repair and development of three ‘brownfield’ palm oil plantations in the Democratic Republic of Congo.

EAIF’s US$5m contributes to a loan facility totalling US$49m, provided to DRC-based agribusiness Plantations et Huileries du Congo SA (PHC), by a four-member syndicate. The other three members of the syndicate are European development finance institutions DEG (Germany), FMO (The Netherlands and BIO (Belgium). PHC is a subsidiary of Feronia Inc, a Canadian-listed company. When Feronia acquired PHC in 2009 the three plantations had suffered from years of underinvestment and considerable disruption to operations caused by the long-running conflict in DRC. It is currently working to rebuild the business.

The loan facility will finance PHC’s continuing investment into equipment, replanting existing planted areas, fertiliser and environmental and social governance expenditures. There is also a strong infrastructure component to PHC’s planned expenditures. PHC maintains extensive publicly-accessible infrastructure in the remote areas of northern DRC where it operates, including water sources, around 1700km of roads and bridges, a number of river ports and three airstrips. PHC also maintains the only social infrastructure available in this part of DRC including four hospitals, other health facilities and local schools. As a loan condition PHC is required to upgrade the boilers at its three palm oil mills, to incorporate electricity-generating turbines, which will boost power supplies locally.

Following decades of conflict in DRC it is currently very difficult for businesses operating there to attract private sector finance for infrastructure. EAIF’s loan helps address this infrastructure financing gap. Currently PHC is one of DRC’s largest employers, with almost 4000 permanent staff and thousands more seasonal workers on its payroll. PHC’s three plantations are brownfield sites, previously planted, and the company operates a ‘no deforestation’ policy. It is working towards Roundtable for Sustainable Palm Oil (RSPO) certification.

Please see www.feronia.com for further information on the company’s activities and forward business plan.