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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
11391
Fiscal year
2013
Status
Active
Guarantee holder
Chayton Africa
Investor country
Mauritius
Host country
Zambia
Environmental category
B
Sector
Agribusiness
Date SPG disclosed
May 22, 2013
Project Board date
June 25, 2013
Gross exposure
 $46.0 million
Project type
Non-SIP
Strategic priority area
South-South
IDA
ESRS
ESRS for Chobe Agrivision Company Ltd.
EIA
EIA for Chobe Agrivision Company Ltd

Project description

This summary covers an investment by Chayton Africa of Mauritius in Chobe Agrivision Company Ltd. in Zambia. The investor has applied for a MIGA guarantee of $46.0 million for a period of up to 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

The project involves an investment by Chayton Africa (CA) to acquire and improve Somawhe Estates, an existing 12,822 hectare commercial farm in the Mpongwe Farm Block in the Copperbelt Province of Zambia. Approximately 2,874 hectares of land are cleared with 2,611 hectares under pivot irrigation. CA intends to bring an additional 1,800 hectares under irrigation. The farm cultivates soya, maize, wheat, and barley for consumption in Zambia.

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

CA plans to implement efficient agricultural practices such as crop rotation and zero tillage, soil and water management, and additional improvements to increase productivity and sustainable crop yields. As well as improving productivity of the land, the introduction of new technologies and methods offers the chance for substantial demonstration effects. 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. Although 58 percent of the land in Zambia (75 million hectares) is classified as having medium to high potential for agriculture, only about 14 percent of arable land is cultivated. The project will also contribute to increased food security in the region. According to the World Bank, food production in Africa needs to double by 2050 to avoid widespread starvation.

The proposed project is aligned with MIGA’s strategic priorities of supporting investments into countries eligible for assistance from the International Development Association and South-South investments.

 

 
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