Fairfax-controlled National Collateral Management Services Ltd. (NCML) is going to invest around Rs 500 crore, agreement awarded by the Food Corporation of India, in order to develop grain storage silos in India under a 32-years.
The proposed investment will be backed by the International Finance Corporation, the investment arm of the World Bank.
Out of the total project cost of Rs 506 crore, 330 crores will be issued by the 7 Project SPVs. The IFC’s proposed investment is by way of subscription to unlisted and secured the Non-Convertible Debentures.
These SPVs are going to develop grain silos which will have an approximate capacity of 50,000 metric tonnes each at 7 locations in the states of Haryana, Punjab, and Uttar Pradesh.
NCML, through its wholly-owned project subsidiaries, will be developing grain storage silos in India under a 32-year agreement.
IFC is expecting the project to support the government’s ability to manage the grain stocks more efficiently, thus benefiting consumers and farmers through better access to staple foods and reduced spoilage.
On Monday, IFC said, “The most significant expected project-level outcome is the expected reduction in post-harvest losses associated with the introduction of modern silos, which in turn would have positive implications both for food security of the Indian consumers and favourable environmental effects from avoided Greenhouse gases emissions. Food safety can be compromised in traditional storage facilities since torn bags, transferred manually numerous times, put the wheat inside at risk of contamination. The shift from the warehouse to silos is expected to reduce wheat losses as a result of improved logistics and better overall facilities,”
The company is majority-owned and controlled by Fairfax India Holding Corporation – the India-focused investment arm of Fairfax Financial Holdings.