On October 27, 2014 MIGA issued a guarantee of $28.9 million to reinsure coverage provided by the Overseas Private Investment Corporation to SilverStreet Private Equity Strategies Soparfi S.à r.l. (SilverStreet), an agricultural investor focused on investing in sub-Saharan Africa. MIGA’s reinsurance to OPIC covers SilverStreet’s investments in Silverlands Tanzania Limited (STL). The coverage is for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves SilverStreet’s investment of up to $60 million in STL to purchase the assets and expand two existing agribusinesses and integrate them under two divisions: the Makota Poultry Division, an integrated poultry business, and the Selous Cropping and Livestock Division. STL is investing in crop irrigation to produce food and feed, a feedmill, storage silos, rearing and laying houses, hatchery equipment, and related infrastructure to create the leading integrated poultry business in Tanzania.
SilverStreet’s investments in Tanzania are driven by emerging trends reflecting the country’s growing population, higher incomes, and a requirement for increased feed supplies to sustain the population’s growing demand for protein products. STL aims to invest in several production centers for protein products in Tanzania including Iringa and Dar es Salaam, and then to target fast-growing markets in Tanzania and potentially neighboring regional countries.
The project’s main development objective is to support agricultural sustainability by expanding Tanzanian land under cultivation through development of further irrigation capacity and improvement of management processes and skills; increasing livestock production through more efficient processes and technology; and construction of underlying agricultural infrastructure. By year five of operations, the two divisions are projected to employ 925 local staff on a permanent basis, along with an additional 120 seasonal employees.
MIGA’s support for the project is aligned with Tanzania’s national development strategy, which identifies agriculture as a priority for economic growth, poverty alleviation, and food security. The project is also aligned with the World Bank’s Country Assistance Strategy (CAS) for Tanzania and the World Bank’s Africa Strategy. Under the first pillar of the CAS (Promote Inclusive and Sustainable, Private Sector-led Growth) the Bank supports the government in improving income in the agriculture sector via support for farmers to adopt more productive agricultural techniques and construction of agricultural infrastructure.
MIGA’s support to OPIC is in accordance with the Agency’s mandate to cooperate with national entities of its member countries, as stated in its Convention.