The loan will allow Al-Jazeera, part of the Al-Husseini Group, to expand its production facilities, including the construction of a new grain mill, as well as providing working capital for the firm. It will also fund an energy-efficiency project for Al-Jazeera’s farmhouse heating systems, with the aim to cut fuel consumption by up to 30%.
The new finance comes almost exactly a year after Standard Chartered Private Equity, the investment arm of Standard Chartered Bank, bought a minority stake in Al-Jazeera for US$35m.
First agribusiness project in Jordan
“We are very pleased to sign our first agribusiness project in the country; to support a strong, local company helping to set quality standards and improve food security in Jordan. In addition, through this investment the bank will contribute to increasing employment opportunities and economic growth in rural areas,” said EBRD vice president Philip Bennett.
According to the EBRD’s project summary document for the project, the bank hopes the project will lead to improvements in the quality of Jordanian poultry products: “The bank’s financing will support market expansion, as planned capex investments will lead to an increased offer of competitive high quality fresh and frozen chicken, leading to forward linkages to consumers who will benefit from access to safer and more hygienic poultry meat. This will demonstrate the success of a local producer promoting a quality brand and hence create more value for the Jordanian poultry sector.”
Grant to cut climate change
The loan will come along with a US$180,000 grant from the EBRD’s Finance and Technology Transfer Centre for Climate Change (Fintecc) programme. Fintecc is aimed at helping companies reduce their emissions with new technology – heat exchangers, in the case of Al-Jazeera, which should reduce its fuel consumption in its farmhouses between 20-30%.
“There is an increasing demand in the region for cost-effective energy efficiency solutions. We designed Fintecc to accelerate the deployment of advanced resource efficiency technologies and to support the development of their supply chains. This investment will act as a regional demonstrator of the cost and environmental savings that are possible through installation of the right technologies,” said Terry McCallion, director of the bank’s Energy Efficiency and Climate Change team.
Elsewhere in the region, the EBRD is also considering a US$25m loan to the Egyptian Food Company, also known as Faragallo, part of the Faragalla Group, a major producer of food and beverages in Egypt. The loan, which is listed as pending final review with the EBRD, will – if approved – provide the firm with working capital, and see the bank offer assistance at developing sales and cutting costs.