On June 27, 2013, MIGA issued a guarantee of $45.9 million to Chayton Africa of Mauritius covering its investment in Chobe Agrivision Company Ltd. in Zambia. MIGA’s coverage is 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.
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 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.