Netafim India’s parent company, Netafim Ltd, is 80% owned by Orbia (formerly Mexichem) and 20% owned by Kibbutzim  Hatzerim (also the founder of Netafim). One of Netafim’s key factories is also located within Kibbutz Hatzerim.

Orbia, founded in 1953, is a Mexican company involved in several industries, including building and infrastructure, data communications, irrigation, chemicals, and more. Orbia focuses on insuring food security, reducing water scarcity, reinventing the future of cities and homes, connecting communities to data infrastructure, and expanding access to health and wellness with advanced materials.

Netafim India is facing delays in receivables caused by the COVID-19 pandemic, which has led to higher working capital requirements. Netafim India requires US$75 million of financing for the coming years to support its working capital needs, cover the financing needs of new community irrigation projects, and execute capital expenditure investments to maintain its production facilities. The proposed US$75 million long-term financing will be in the form of Non-Convertible Debentures.

 Funds will be disbursed to Netafim India to cover its financing needs throughout the country, with the largest use of proceeds being in the states of Andhra Pradesh, Gujarat, Tamil Nadu, Telangana, and Chhattisgarh.

 Development impacts will mainly depend on Netafim India’s ability to continue expanding its presence and its sales in India. IFC does not foresee any governance risks. The usage of MIS by farmers will contribute to (i) improving yields, (ii) generating higher incomes, (iii) reducing water and fertilizer usage, (iv) reducing energy consumption by decreasing the amount of water pumped and (v) strengthening farmers resilience to climate change.                                                  

 This is a category B project according to IFC’s 2012 Environmental and Social Sustainability Policy because the project is expected to generate limited and site-specific E&S impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Material E&S risks and impacts include the following: those associated with the extrusion of drip lines and assembly of the micro-irrigation components, notably the use of energy and water, the efficient use of raw material inputs, the management of wastes and their recycling or proper disposal, and the appropriate management of the company’s human resources and compliance with the labor laws of India.