Announcement of IFC to Support a Major Agribusiness Venture in Zambia February 17, 1987

February 17, 1987 Monique Amaudry Press Release No. 88/32 202/676-9331 IFC SUPPORTS A MAJOR AGRIBUSINESS VENTURE IN ZAMBIA The International Finance Corporation (IFC) is helping to finan- ce a $13.5 million farming development at Sinazongwe on Lake Kariba in the Gwembe Valley area of Zambia. The farm will grow cotton, groundnuts and wheat. IFC, which is the leading multilateral agency providing finan- cing without government guarantee to private sector ventures in develop- ing countries, is providing $3.7 million in loan and $0.8 million in equity to the Gwembe Valley Development Company, a joint venture company. Other financing includes a loan/equity package of approximately $3.6 million from the German Finance Company for Investment in Developing Countries (DEG) of the Federal Republic of Germany, a loan of $1 million from Grindlays Bank International of the United Kingdom, and a loan of $1.2 million equivalent from the Government of Zambia. The major shareholders in the project are Lummus Agricultural Services Company, a subsidiary of Lummus Industries Incorporated of Columbus, Georgia, USA, the world's leading manufacturer of cotton gins, which will provide management, and the Zambian subsidiary of Hoechst A.G., the German chemical company, providing technical assistance. Other shareholders include the Lint Company of Zambia. The farm will cover 2,100 hectares, which will all be equipped with center-pivot irrigation, and will include machinery, buildings and grain storage. When fully*devesloped, it is expected to produce each year over 8,000 tons of wheat, 2,800 tons of lint cotton and 1,000 tons of - MORE - - 2 - groundnuts. The cotton and groundnuts will be exported to Europe, and the wheat will be sold in Zambia. At present, Zambia imports over half its wheat requirements. The farm will provide full time employment for about 200 people, and seasonal employment for a further 2,500. Furthermore, the project company, in conjunction with Africare, a Washington-based voluntary- funded agency promoting rural development in Africa's poorest countries, will establish an outgrower program for neighboring communities. This program will advise and assist small farmers in the surrounding area. They will benefit from the improved supply of agricultural inputs and market access which will accompany the development. IFC holds investments in six other companies in Zambia, amount- ing to $60.9 million in the mining, textiles, footwear, hotels, agricul- ture and development finance sectors. - END -