The European Investment Bank (EIB) and the National Bank of Malawi (NBM) have announced a 30 million euros facility for the financing of private sector projects in Malawi with a special focus on the development of agricultural storage capacity in the country.
“The lack of agricultural storage facilities has been an issue for the development of the agriculture sector in Malawi”, said Robert Schofield, head of the EIB’s Global Partners’ Financial Sector Division. “The EIB facility aims to address this issue to the benefit of the farmers as well as the Malawian authorities by improving market transparency and providing information for a more efficient agriculture policy.”
According to NBM’s Chief Executive Officer Dr. George Partridge, new agro storage assets will greatly reduce post-harvest losses in Malawi and help in improving national development.
The African Post Harvest Losses Information System of the Monitoring Agriculture Resources shows that Malawi loses over 23 per cent of its maize crop due to post harvest loss occasioned by among other factors, the absence of quality grain storage facilities.
The funding facility will support projects consisting of new storage capacity for agricultural commodities, which will be certified under a warehouse receipt system (WRS) offered by the Agriculture Commodity Exchange and made available to third parties.
This approach is intended to stimulate a wider inclusion of farmers in the national WRS, under which farmers can use warehouse receipts as collateral to enhance access to financing.
Smallholder farmers’ access to quality grain storage facilities will be achieved by making available 30 per cent of the space in each and every agri-storage facility to smallholder farmers participating in the WRS.
The facility developed together with USAID and ACE will contribute to Malawi’s key developmental priorities including private sector development, increased food security and reduction of poverty.
It will also support higher resilience towards climate change by mitigating food supply volatility due to adverse weather events.
The European Investment Bank is the only bank owned by and representing the interests of the member states of the European Union (EU). It works with other EU institutions to implement EU policy.
More than 90 per cent of its activity is in supporting projects that make significant contributions to growth and employment in Europe but it also supports the EU’s external development projects such as this one.