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Project Brief

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 Limited.
Project ID
9926
Fiscal year
2011
Status
Active
Guarantee holder
Chayton Atlas Investments
Investor country
Mauritius
Host country
Zambia
Environmental category
B
Sector
Agribusiness
Date SPG disclosed
April 15, 2011
Project Board date
May 27, 2011
Gross exposure
 $5.2 million
Project type
Non-SIP
ESRS
ChaytonPsi_ESRS1.pdf
EIA
Chayton_EIA_finalreport.pdf
Chayton_EIA_Annexes.pdf

View Summary of Proposed Guarantee


On June 30, 2011 MIGA issued a guarantee of $5.2 million to Chayton Atlas Investments of Mauritius for its equity in Chobe Agrivision Company Limited in Zambia. The coverage is 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 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 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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