Malawi: Chakwera Discusses Mega Farms Funding With Afrexim Bank
President Dr Lazarus McCarthy Chakwera has extensively discussed with Afrexim Bank on mega farms funding, the Tonse Alliance flagship campaign promise which is expected to create more jobs in the agricultural sector.
Minister of Agriculture Sam Kawale who attended the meeting, has confirmed that cabinet ministers and other high ranking officials discussed several issues with Afrexim Bank officials in Accra, Ghana.
The government, through the Ministry of Agriculture, and Afrexim Bank are working together to implement the Mega Farm Initiative in Malawi in line with President Dr Lazarus Chakwera’s agenda of food security, wealth and job creation through Agriculture mechanization and industrialization.
Kawale says the target is to develop 50,000 hectares of arable land and to facilitate crop production in rice, maize, soya beans and cotton as well as livestock to enhance export revenue and food security.
“Afrexim Bank proposal to the Malawi Government comprise the financial advisory value propositions such as capital raise for the Macro-Finance institutions and Agriculture Development Bank, development of financing package, and bankability assessments etc.
“Identifying indicative implementation methodology: i.e. Profile of SPVs, critical success factors, Key parties and responsibilities,” says Kawale.
He also says the Afrexim Bank proposal include funding and risk bearing possibilities, saying this consists of project finance loan(s), project preparatory facilities and guarantees; and export development and Intra African Trade advisory services, saying this includes twinning, manufacturing transfers, sourcing of anchor tenants, off-takers and strategic partners etc.
Kawale says the focus is to enhance intra-African trade, industrialization and export development.
He says the Bank is uniquely positioned to advise and provide strategic options for the project due to its extensive global network with in-depth sector understanding of required development activities.
The minister says the Bank also has passion for Africa’s development that will ensure a fit-for-purpose funding solution that is supported with cutting-edge advisory services towards facilitation of a sustainable Programme.
He says the Bank also has direct access to liquidity pools along with the capacity to underwrite multi-million-dollar facilities to ensure an effective and timely execution of the Mega Farms Initiative.
“Ministry of Agriculture has received over 950 applications for Mega Farms and Anchor Farms, and the number keeps growing, to be considered for this project.
“Apart from the applications from the public, the Ministry has farms for this project through the Ministry of Agriculture and in the process of making it ready, for example Spearhead land and in consultation with private estate owners,” he says.
He says Afriexim proposals include financing models such as Build Operate and Transfer and as a next step a feasibility study will be conducted and already Afrexim Bank has offered Project Preparatory Facility that can support these early activities.