The Multilateral Investment Guarantee Agency (MIGA), the World Bank’s political risk insurance arm, has issued a guarantee worth $23.8 million to a maize and wheat-milling operation in Zambia.
The guarantee enabled Agrivision Africa, also known as Chayton Africa, a Mauritius-based diversified agriculture business, to issue a loan to its Zambian subsidiary Chobe Agrivision for the acquisition of Mpongwe Milling, a maize and wheat mill in Kitwe.
This is MIGA’s fifth agribusiness project in Zambia. In the country it covers, covering grain cultivation, milling, livestock and fisheries, and is currently considering re-insuring Overseas Private Investment Corporation (OPIC) in support of SilverStreet Capital, the African agribusiness private equity firm.
“We’re pleased to continue our support to the development of Zambia’s agribusiness sector and Agrivision Africa’s growth,” said Keiko Honda, MIGA’s chief executive, in the release. “The government of Zambia and the World Bank Group have identified agriculture as a priority to help the country reduce poverty and vulnerability of the poor.”
The acquisition is part of a wider plan for Agrivision to invest further along the agribusiness value chain and it intends to improve the mill’s capacity which is operating below its potential, according to a press release.
“Our investment in Mpongwe Milling has increased output and supplemented food supply in the region,” said Stuart Kearns, Zambian country manager at Agrivision, in a statement. “This investment builds on our long-standing commitment to transforming Zambia’s agribusiness industry and helping the sector and region achieve its significant potential.”
Chayon Africa is part-owned by Zeder Investments, a listed Southern Africa agribusiness investment firm, and by Norfund, the Norwegian Investment Fund for Developing Countries.
Zeder Investments is actively seeking new investment opportunities that have strong management, scalable business models and established brands, according to the website.
“We prefer to scale up, rather than start up, businesses with core repeatable processes and strong leadership teams,” it reads.