Malawi: AfDB Group Approves US$ 26 million Grant for Agricultural Project

Share |

Tunis, 9 September 2009 - The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank (AfDB) Group approved on Wednesday, 9 September 2009 in Tunis, a grant of US$ 23.6 million dollars (UA 15 million), to finance the Malawi Agricultural Infrastructure Support Project (AISP).

The objective of the project is to enhance agricultural productivity and strengthen Malawi’s overall food security through increased irrigation and efficient agricultural water management in the three Agricultural Development Divisions of Salima, Blantyre and Shire Valley, in four administrative districts (Nkhotakota, Neno, Chikwawa and Nsanje), in the Green Belt Zone which the Malawian government has accorded top priority for agricultural development.

Estimated to be fully implemented over a five-year period, the project will enhance the participation of an estimated 10,000 household commercial agriculture farmers within the region. The main components of the project include infrastructure development, capacity building, as well as project management and coordination. Infrastructure development will entail the installation of central pivot systems for sugarcane production, water distribution and drainage systems, the development of small scale irrigation schemes and some 13 modern market platforms. The project will introduce the use of solar/wind energy in water drafting in the small-scale irrigation schemes.

The capacity building component will involve mobilization and sensitization of farmers, training of some 3,350 farmers, 45 government staff as well as the recruitment of service providers to promote marketing by smallholder farmers, while project management component consists mainly of technical and logistic support programmes to the Agricultural Sector Wide Programme Secretariat, already established at the Ministry of Agriculture and Food Security.

The total project cost is estimated at UA17.01 million (about US$ 26.7 million), of which ADF share is UA 15 million or 88.2% of the entire cost, covering the entire foreign exchange portion and 65% of the local currency costs.  ADF concessionary grant resources are repayable over 50 years at zero interest rate, including a 10-year grace period and a service charge of 0.75 % per annum.  

The project falls within the framework of the 2006-2011 Malawi Growth and Development Strategy (MGDS) which is being implemented for the period 2006-2011. The Strategy has identified agriculture as a prime mover of economic growth, with food security as a key vector of growth and poverty reduction.  The AfDB has been an active player in Malawi’s agricultural sector, particularly in the area of irrigation agriculture.

Furthermore, AfDB’s role is in line with the broad development vision of other donor agencies in Malawi, in particular, the agricultural commitments of the Donor Committee on Agriculture and Food Security (DCAFS). Since the establishment of the Malawi Field Office (MWFO), the Bank has played a leading role in donor aid coordination in Malawi.

The AfDB Group has been supporting Malawi’s development effort since 1969. Total commitments by the end of December 2008 amounted to UA 690.8 million (about US$ 1.08 billion), net of cancellations for 73 development projects, 11 studies and lines of credit.

*1 UA = 1. 57 US$ as at 9 September 2009