The Agricultural Storage Investment Facility (ASIF) strategy of USAID’s Southern Africa Trade Hub came a significant step closer to fruition during the week of December 7, 2015, with the final project appraisal in Malawi by the European Investment Bank (EIB) for a warehouse investment credit line to agribusiness through a prominent Malawian bank.
The Trade Hub has worked with agribusinesses in Malawi for several years to define a pipeline of warehouse investment requirements with a focus not only on the large cities of Lilongwe and Blantyre but also the rural areas. Agribusiness accordingly expressed interest to invest over US$20 million to create nearly 250,000 metric tons of new agricultural storage capacity in 20 locations across the country. This would increase private sector-owned storage capacity by approximately 50%, broadening the footprint of the warehouse receipt system across Malawi and creating the foundation for a third party warehousing industry in the country.
The envisaged EIB credit line, channeled through a prominent Malawi bank to local agribusiness, aims to provide a significant amount of additional long term USD-denominated concessional financing earmarked for capital investment in warehousing infrastructure. It has been warmly welcomed by agribusiness in Malawi.
While in Malawi, the EIB will be visiting Lilongwe and Blantyre to perform a final assessment of the bank while also confirming the eligibility of the pipeline agribusinesses to ensure an efficient, integrated approval process leading up to signature and disbursement.
It is anticipated that the EIB line will be accompanied by other ASIF credit lines targeting warehousing for farmers and SMEs, thus addressing all stakeholders in the value chain.
Photo: The Deputy Managing Director of RAB Processors briefs the European Investment Bank's due diligence team, together with a senior manager from the National Bank of Malawi, on warehouse investment plans