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Afghanistan

Kabul Dairy Processing Plant

$1.8 million
Agribusiness
Project Brief
Active

On November 22, 2013, MGA issued guarantees totaling €1.35 million ($1.8 million equivalent) covering an investment by Van den Heuvel Dairy & Food Equipment B.V. of the Netherlands and two private investors in the Kabul Dairy Processing Plant. The guarantees are for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project consists of the establishment of a dairy processing plant that will process, produce, and distribute high-quality dairy products such as milk and yogurt primarily for the market in Kabul, Afghanistan. It is supported by the Agency for International Business and Cooperation of the Netherlands under the Ministry of Foreign Affairs.

Dairy products are a major food source in Afghanistan, but the sector was largely destroyed during the Afghan Civil War of 1992-1996. Since then, imported dairy products have gained a near monopoly in large metropolitan areas such as Kabul. The project will meet the need for locally produced high-quality dairy products—a cheaper and healthier alternative to imported UHT milk.

The project is expected to employ 20-25 workers.

MIGA’s support for this investment is aligned with the World Bank Group’s Interim Strategy Note for Afghanistan, particularly with regard to providing domestic sources of growth and jobs.

This project is also aligned with MIGA's objective of facilitating investments in conflict-affected environments as well as countries eligible for assistance from the International Development Association. The project was underwritten through MIGA's Small Investment Program.