The Asian Development Bank (ADB) signed today agreements in Hohhot, Inner Mongolia, with leading commercial banks to support Inner Mongolia Saikexing Breeding and Biotechnology Group (Saikexing) to reduce environmental pollution, improve food safety, and expand the domestic supply of quality milk in the People’s Republic of China (PRC).
The Korea Development Bank, the mandated lead arranger, and Fubon Bank (China) Co., Ltd., the lead arranger, participated in the onshore yuan complementary loan. Bank of China was the Participation Agent. The complementary loan is in addition to ADB’s direct onshore yuan loan provided to Saikexing in August 2016.
ADB’s financing package totaling up to $125 million equivalent will enable Saikexing — PRC’s fourth largest dairy farming company — to invest in cutting-edge technologies to help reduce environmental pollution and improve dairy farm management practices in the dairy industry. It will also allow the company, which currently owns in excess of 100,000 cows across 27 farms, to develop at least another 4 new farms with 20,000 cows in total.
“Through this onshore local currency complementary loan, ADB mobilized commercial cofinancing to support environmentally sustainable large-scale dairy farming and to address the coveted demand for quality milk produced locally in the PRC,” said Christopher Thieme, ADB’s Deputy Director General of the Private Sector Operations Department.
This marks ADB’s second complementary renminbi-denominated loan in the PRC, and the first local currency commercial cofinancing in the PRC’s agriculture sector. ADB acts as the lender of record through the local currency complementary loan structure.