Netafim project in Ethiopia financed to the tune of $200mm

The Ethiopian government sugar company benefit from Netafim's end-to-end irrigation solution.
March 11, 2016
Netafim project in Ethiopia financed to the tune of $200mm (Enlarge)

Netafim Ltd., an Israeli company, has taken on a major $200 million irrigation project for the Ethiopian government's sugar company covering 7,000 hectares (17,500 acres). Financing is being led by the corporate division of Bank Hapoalim (TASE: POLI).


Finance will be made available in the form of buyers' credit. This will be fully guaranteed by the Ethiopian government in tranches against specific goals, to be paid by the government sugar company to Netafim direct as payment for exports. The repayment risk is to be insured by a consortium of insurance companies to include Ashra Israel Export Insurance Corp. Ltd. and other high credit rating international insurance companies. The credit will be spread over nine and a half years.


Netafim, a world leader in smart irrigation for sustainable agriculture, has 28 subsidiaries, 17 factories and about 4,300 employees worldwide. Netafim is managed by Ram Maidan, is controlled by European private equity company Permira and Kibbutz Hazerim and supplies more than 110 countries.


Netafim's current project is to supply an end-to-end solution ranging from engineering design to the supply of infrastructure for drawing and transporting water, and advanced irrigation and control systems. It also extends to agronomic and engineering consultation by both Israeli and international Netafim experts. Sugar cane irrigation will be achieved by advanced subsurface drip systems. This method has proven effective in substantially increasing crop yields while saving water and other resources. The work, which is to extend into late 2017, is to start immediately.


Netafim CEO Ran Maidan said "This is a large international agricultural project and a strategic project that reinforces Netafim's business in both Ethiopia and elsewhere in Africa. Netafim was selected to lead the project because of its proven ability to provide advanced end-to-end solutions for large-scale, complex projects, while advising its customers at all stages. Netafim will lead the project together with the Baran Group and the Global Africa Industries Group, led by Itai Terner. We thank Bank Hapoalim with which we have worked and which has helped us greatly in creating an overall solution to allow the project to go ahead. We are confident that this project will be successful, as were similar projects that Netafim has carried out in India, South Africa, Brazil and Peru."

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