NEW DELHI, INDIA (4 October 2022) — The Asian Development Bank (ADB) signed a $30 million loan with Smartchem Technologies Limited (STL) to finance capital expenditure and research and development of enhanced-efficiency specialty fertilizers as well as investments to promote energy efficiency, health, and safety.
In addition, an accompanying technical assistance grant will focus on improving the climate resilience of up to 4,000 smallholder farmers through building their soil management and financial literacy skills.
“Private sector investment in agriculture is critical to help farmers adapt to climate change. Fertilizer companies need to be at the forefront of climate adaptation as their products can increase productivity and improve resilience to the impacts of climate change,” said ADB’s Director General for Private Sector Operations Suzanne Gaboury. “The private sector can play an important role in bringing more advanced fertilizer products to the market, investing in local manufacturing to reduce reliance on imports, and training farmers in proper usage and soil management.”
Fertilizer-related runoff is a primary contributor to the pollution of India’s inland waterways. Excessive and improper use of single-nutrient fertilizers such as urea has led to eutrophication, which is when bodies of water are saturated with nutrients, which leads to algal blooms that result in waterway hypoxia that kills fish. The indiscriminate use of urea has also led to significant deterioration of soil health, which is affecting crop productivity. Enhanced-efficiency specialty fertilizers are tailored to specific crops and soils and have unique features to ensure a controlled release. Using enhanced-efficiency fertilizer can reduce fertilizer-related water pollution by 60%, as well as support the transition to more natural farming practices while maintaining productivity and food security.
“ADB’s financial assistance will help us to further improve our enhanced efficiency specialty fertilizer business including applied R&D and grass-root farmer training initiatives. It is encouraging to have our efforts towards crop and soil specific fertilizer systems and improvements to nutrient use efficiency and balanced soil nutrition, validated by international partners like ADB,” said STL Chairman and Managing Director S. C. Mehta. “We will continue to strive to deliver our vision of raising the yield and quality of Indian agriculture to the global best. We look forward to growing this partnership with ADB.”
Food security is a priority for ADB, which recently announced plans to provide at least $14 billion over 2022–2025 to ease a worsening food crisis in Asia and the Pacific and improve long-term food security by strengthening food systems against the impacts of climate change and biodiversity loss. Direct support to farmers and agribusinesses is key to this initiative, with an expected $3.5 billion from ADB and $5 billion in cofinancing to be provided to the private sector. The loan to STL is part of this direct support to the private sector.
Formed in 2015, STL is a subsidiary of Deepak Fertilisers and Petrochemicals Corporation Limited, one of India’s leading fertilizer and chemical businesses. The group is headquartered in Pune, Maharashtra, and has four manufacturing facilities across the country.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.