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Projects

Summary of proposed guarantee

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. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Chobe Agrivision Company Ltd.
Project ID
10814
Fiscal year
2012
Status
Active
Guarantee holder
Chayton Atlas Investments
Investor country
Mauritius
Host country
Zambia
Environmental category
B
Sector
Agribusiness
Date SPG disclosed
May 11, 2012
Project Board date
June 21, 2012
Gross exposure
 $9.5 million
Project type
Non-SIP
Strategic priority area
IDA
ESRS
ESRS for Chobe Agrivision Company Ltd. in Zambia -- Project Beta
ESRS for Chobe Agrivision Company Ltd. in Zambia -- Expansion of Project Psi

This summary covers an equity investment by Chayton Atlas Investments (CAI) of Mauritius in Chobe Agrivision Company Ltd. in Zambia. The investor has applied for a MIGA guarantee of $9.5 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 expansion of "Project Psi" supported by MIGA in fiscal year 2011. The project involved the acquisition of two farms in the Mkushi farm block in Zambia’s Central Province, with a combined land area of 2,517 hectares. The farms cultivate maize, wheat, and soya for consumption in Zambia and eventually neighboring countries. 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. CAI has now made a further investment in Chobe to install pivot irrigation systems on the undeveloped part of Project Psi and to acquire four adjacent farms, with additional capital expenditure planned for improvements to the four newly-acquired farms (Project Beta).

Environmental Categorization

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.

Development Impact

The agricultural sector has been identified by both the Zambian government (in its national development plan) and in the World Bank’s Country Partnership Strategy as a key area where there is potential to contribute to development and economic growth. In Zambia, CAI estimates that only 1.1 percent of the potential fertile Guinea Savannah agricultural area is cropped. Moreover, CAI believes that introducing highly efficient agricultural practices such as crop rotation and zero tillage, soil and water management, and certain technological improvements will result in increased productivity and sustainable crop yield enhancement. As well as improving productivity of the land, the introduction of new technologies and methods offers the chance for substantial demonstration effects. 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 project is aligned with MIGA’s strategic priorities of supporting investments into countries eligible for assistance from the International Development Association.

 
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