Ethiopia’s Allied Chemicals to get $17 million from IFC to build fertilizer plant

World Bank, through its private investment arm, International Finance Corporation (IFC), is preparing a financing package of up to $17 million for Allied Chemicals Share Company to support the construction of Ethiopia’s first privately owned compound fertilizer blending facility, a move aimed at boosting local agricultural productivity.

The project, currently pending board approval, will fund the development of a greenfield NPK/NPS fertilizer blending plant in Adama, about 90 kilometers east of Addis Ababa.

Strengthening agricultural supply chains

The investment is designed to expand domestic fertilizer production capacity in Ethiopia, reducing reliance on imports while improving access and affordability of critical farm inputs.

IFC’s financing package includes an $11 million A Loan structured as a local currency-linked facility in Ethiopian birr, supported by a blended finance subsidy, alongside $6 million mobilized from parallel lenders.

The initiative is expected to address longstanding inefficiencies in Ethiopia’s fertilizer market, where supply constraints and external shocks have historically limited availability for farmers.

Expanding domestic manufacturing

Founded in 2008, Allied Chemicals is Ethiopia’s largest domestic producer of industrial chemicals, operating three manufacturing facilities and supplying more than 1,300 customers, including major fast-moving consumer goods and beverage companies.

The company produces 18 chemical and mineral products and is now positioning itself to expand into fertilizer blending as part of a broader diversification strategy. The project, with an estimated total cost of $34 million (ETB 3.69 billion), will be financed on a roughly 50/50 debt-to-equity basis, with the sponsor contributing nearly $17 million in equity.

Ownership and strategic backing

Allied Chemicals was founded by Rajesh Gupta, who, alongside his family, holds about 70 percent of the company. The remaining stake is owned by Ascent Capital, an IFC-backed investment firm.

Supporting market entry and farmer adoption

Alongside financing, IFC is exploring an advisory program to support Allied’s entry into the fertilizer market, including a pilot outreach targeting approximately 3,000 farmers and the establishment of 21 demonstration plots across key agricultural regions.

The advisory effort is expected to integrate with existing World Bank Group initiatives, including BOOST-2 and SMART-Potato, to leverage established distribution networks and strengthen agronomic practices.

Boosting productivity and resilience

Allied Chemicals Share Company (Allied) is Ethiopia’s largest domestic manufacturer of industrial chemicals, headquartered in Addis Ababa with three manufacturing facilities in Ethiopia. Founded in 2008, the company produces 18 chemical and mineral products and serves over 1,300 customers across Ethiopia, including large FMCG manufacturers and beverage companies.

The project is expected to deliver broader economic benefits by increasing value addition within Ethiopia’s agricultural supply chain, creating jobs, and enhancing the competitiveness of the country’s farming sector.

By establishing a domestic fertilizer blending industry, the investment could help reduce vulnerability to global supply disruptions while supporting more intensive and efficient fertilizer use among farmers.