|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 equity investment by Chayton Atlas Investments of Mauritius in Chobe Agrivision Company Ltd. in Zambia. The investor has applied for a MIGA guarantee of $5.7 million for a period of up to 10 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.
The project involves the acquisition of two adjacent farms in the Mkushi farm block in the Central Province of Zambia. These are commercial farms currently cultivating maize, wheat, and soya. The investor plans to increase the amount of land under irrigation from 210 to 580 hectares through increased capital expenditure. The farms are located in an area that has abundant renewable water resources for irrigation development and a climate that supports two crops per year with irrigation. A “Contract Farming” business was acquired in addition to the two farms. The contract farming operation provides machinery and equipment services to the two farms as well as third party farms.
The project is a category B under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary.
The agricultural sector has been identified by the Zambian government and by the World Bank (in its Country Partnership Strategy) as a key area where there is potential to contribute to development and economic growth. Chayton estimates that only 1.1 percent of the country’s potential fertile Guinea Savannah agricultural area is cropped. Moreover, the introduction of highly efficient agricultural practices (for instance, crop rotation and zero tillage), soil and water management, and certain technological improvements will result in increased productivity and sustainable crop-yield enhancement. The introduction of new technologies and methods also offers the chance for substantial demonstration effects for local farmers. The proposed project will also contribute to increased food security within Zambia and the broader Southern African Development Community – the target market for consumption.
The proposed project is aligned with MIGA’s strategic priorities of supporting investments into countries eligible for assistance from the International Development Association.