The World Bank Group investment arm the International Finance Corporation is extending $35 million in debt assistance to Zambia’s largest agribusiness entity towards the $100 million expansion program aimed at doubling its Mpongwe asset. According to a stock exchange news release, Zambeef (AIM: ZAM), announced a K570 million debt facility with the Washington based lender. Zambeefs strategy is supported by global grain market dislocations fueled by the Russo – Ukrainian war that shorted the world food supply significantly.
READ ALSO: Zambeef to Double its Mpongwe Asset Capacity with a $100million Investment as Global Commodity Prices Spiral
The IFC term loan will have a tenor of 8 years with its first drawdown expected 01 August 2022, and will be available onto 31 December 2023 maturing 15 June 2030. The facility will attract quarterly interest payments commencing on 15 September 2022, with a fixed interest rate being currently within the range of those other Kwacha denominated facilities held by the company. The principal will start amortizing 2 years from drawdown.
“Throughout its history Zambeef has grown with the Zambian people, providing jobs, livelihoods and world-class shopping for our customers by adding value to local produce. This latest support from IFC is part of our US$100 million investment strategy to expand that even further,” Faith Mukutu, Zambia Chief Executive Officer said.
“Agribusiness is a key driver of economic growth and essential to ensure food security,” said Carlos Katsuya, IFC’s Senior Country Manager for Zambia. “IFC’s investment in Zambeef will continue to help develop and diversify this key sector, create thousands of jobs and provide quality, affordable food to Zambian consumers, while also expanding access to best practices and finance for the sector in the region.”
Zambeef chief executive officer Faith Mukutu and IFC senior country manager Carlos Katsuya during signing ceremony in Lusaka.
Zambeef remains a key driver in the agribusiness faculty contributing to the Southern African nations agriculture production contributing around 20% of gross domestic product (GDP) and about 12% of national export earnings.
Zambeefs is seeking to double its Mpongwe asset through wheat growth expansion.
The investment will not only propel Zambeefs Mpongwe asset but will drive the agribusiness climate resilience strategy harder through supporting the entities efforts to improve Zambeef’ s energy and fuel efficiency aimed at reducing more than 14,000 metric tons of greenhouse gas emissions every year. The IFC will also provide advisory services to help Zambeef set up a comprehensive carbon assessment planning system, which will accelerate longer-term climate-smart initiatives to combat climate change.
Additionally the investment will enable Zambeef to introduce a new health and biosecurity management system across its animal production chain. This will facilitate easier trade and allow for the safe transfer of live animals and products to prevent entry of diseases that could be circulating in domestic or regional markets.
The investment aligns with IFC’s strategic approach to agribusiness, which focuses on enhancing food security, boosting inclusive growth and shared prosperity, and making sustainability a business driver.
READ ALSO: Faith Mukutu ascends to the helm of Zambeef leadership as Chief Executive Officer
Zambeef recently made changes to its executive suite appointing Faith Mukutu as chief executive officer effective 01 July 2022. Mukutu took over from Walter Roodt who remains in the business managing strategic projects.
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