On December 19, 2014, MIGA issued a guarantee of $23.8 million covering an investment by Agrivision Africa of Mauritius in Chobe Agrivision Company Ltd. 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 Mpongwe Milling (2009) Ltd., an existing wheat and maize mill in Kitwe, in the Copperbelt Province of Zambia. Mpwonge Milling’s wheat and maize mills produce flour, bran, breakfast meal, and roller meal. The company markets their products directly to the public (sold at depots and the mill), as well as through retailers and bakeries. Chobe Agrivision intends to improve the performance of the mills, which are currently operating below capacity.
The project’s main development objective is to increase food supply by improving the milling operation. It will have an important demonstration effect for other local producers and potential investors. The project is also expected to benefit the local economy through job creation, skills enhancement, and increased participation of local actors in the supply chain.
The Zambian government’s national development plan and the World Bank Group’s Country Partnership Strategy both identify the agricultural sector as a key area that can contribute to the country’s development and economic growth. MIGA’s support is also aligned with the agency’s strategic priority of covering investments into countries eligible for assistance from the International Development Association.