Global food and agribusiness Olam International and its wholly owned subsidiary Olam Treasury have secured multi-tranche financing facilities worth US$176mn.

The International Finance Corporation (IFC) and Japan International Cooperation Agency (JICA) are providing the financing, which consists of two tranches: a five-year term loan of US$120mn and a seven-year term loan of US$56mn.

Proceeds will be used for the procurement of specific agri-commodities from smallholder farmers in Vietnam, Indonesia, Timor-Leste, Papua New Guinea and Uganda, as well as the expansion of Olam’s cocoa processing facility in Indonesia.

Speaking about the deal, IFC senior director for manufacturing, agribusiness and services, Tomasz Telma, says: “This new investment in Olam will help smallholder farmers in developing countries reach global markets and boost their incomes.”

This is the first time JICA and IFC have co-financed a project in the agri-sector, with the Japanese agency’s senior vice-president Junichi Yamada saying that it will look to co-operate with IFC and expand agri-sector support in the future.

Yamada adds: “We expect sustainable cacao business in Indonesia will be expanded through this loan facility, which we believe will provide stability to smallholder farmers.”

In the past couple of years Olam has signed two sustainability specific loans, which directly linked pricing to Olam meeting certain environmental, social and governance performance criteria.

In 2018 Olam inked Asia’s first sustainable club loan, before signing a sustainability-linked US$525mn revolving credit facility (RCF) in September 2019.

Meanwhile in October last year, Olam struck a US$1.5bn multi-tranche revolving credit facility (RCF) as the company bid to refinance existing debt.