The corporate division of Bank Hapoalim (TASE: POLI) has led a deal of over $200 million for the Ethiopian government's sugar company to finance a huge irrigation project by Israeli company Netafim Ltd.. The project covers 7,000 hectares (17,500 acres).
The finance will be provided as buyers' credit, fully guaranteed by the government of Ethiopia, in tranches against milestones in the project, and will be transferred directly to Netafim as payment for exports. The government sugar company will repay the credit over 9.5 years, and the repayment risk is insured by a consortium of insurance companies that ilcudes Ashra Israel Export Insurance Corp. Ltd. and international insurance companies with high credit ratings.
Netafim is a world leading company in smart irrigation solutions for sustainable agriculture. It has 28 subsidiaries, 17 factories, and some 4,300 employees around the world. It supplies to over 110 countries. The company is managed by Ran Maidan and is controlled by European private equity firm Permira and Kibbutz Hazerim.
In the current project, Netafim will supply an end-to-end solution from engineering design to the supply of infrastructure for drawing and transporting water, advanced irrigation systems, and control systems, and including agronomic and engineering consulting by the company's experts from Israel and elsewhere. The sugar cane will be irrigated using advanced subsurface drip irrigation, which has been proven to boost crop yields substantially while saving water and other inputs. The work will start immediately and will be spread over this year and next.
Netafim CEO Ran Maidan said, "This is a large international agricultural project, and a strategic project that strengthens Netafim's business in Africa in general and in Ethiopia in particular. Netafim was selected to lead the project because of its proven ability to supply advanced end-to-end solutions for large and complex projects, while advising the customers at all stages. Netafim will lead the project together with Baran Group and Global Africa Industries Group, led by Itai Terner. We thank Bank Hapoalim with which we worled and which haleped us greatly in creating an overall solution to enable the project to go ahead. We are sure that this project will be a success, like similar projects that Netafim has carried out in India, South Africa, Brazil, and Peru."
Published by Globes [online], Israel business news - www.globes-online.com - on March 6, 2016
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