|Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.|
This summary covers an investment by Tulbagh Holdings LLC of the United States in Austin Scott Farms in South Africa. The investor has applied for a MIGA guarantee of $3 million for a period of up to seven years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project consists of the acquisition of Austin Scott Farms situated on the southwestern flanks of Tulbagh Mountain. The acquisition of the shares in the business would entail acquiring all assets comprising land (184 hectares), buildings, equipment, existing crops and stock, bottling plants, intellectual property, water rights, and all other assets or rights required for continued business operation. Terroir intends to improve the quality of wines through investment and incorporating industry best practices into the vineyards, winemaking process, and winery. The anticipated wine production will increase from 4,700 cases of premium wines for the 2011 vintage to approximately 13,500 cases in 2015, and 18,700 cases in 2017.
The project is a Category B under MIGA’s environmental and social review procedures because the impacts are limited in number, and mitigation measures are readily identifiable. The key environmental and social issues are water and waste management (effluent treatment), biodiversity conservation (Swartland Shale Renosterveld), and traffic management. An environmental management plan will be developed to inform project design and fulfill the requirements for the necessary environmental and planning permits. Withers Environmental Consultants has prepared an environmental due diligence report on behalf of the client, click here to read more.
Austin Scott Farms intends to join the Biodiversity and Wine Initiative (BWI), a pioneering partnership between the South African wine industry and the conservation sector. The goals are to minimize the further loss of threatened natural habitat, and to contribute to sustainable wine production through the adoption of biodiversity guidelines by the South African wine industry.
Tulbagh’s main economic sectors consist of agriculture (vineyards and soft fruit), tourism, and the services industry. The town has also experienced significant diversification of its economy with the emergence of a number of new small, medium and micro businesses, particularly in the personal services, financial, and business sectors.
Notwithstanding this economic growth there remains a great deal of unemployment, especially within the lower-income groups in the greater region. The proposed project will have a significant socioeconomic benefit to Tulbagh and the surrounding communities by creating jobs (temporary in the construction phase and permanent in the operational phase) in various sectors, investing in the training of staff, and generating rates and taxes for the Tulbagh Municipality. Workers will also be trained with the industry’s current standards and best practices to promote and build upon their skills. The investors intend to adhere to the principles underlying the Broad‐Based Black Economic Empowerment Act of 2004 (B‐BBEE Act).
MIGA’s proposed support for the project is aligned with the World Bank Group’s Country Partnership Strategy which calls for the use of MIGA instruments to support small and medium-scale enterprises and increase foreign direct investment. The project would be underwritten through MIGA’s Small Investment Program.