The European Investment Bank (EIB) and First Capital Bank (FCB) have signed a €12.5 million (approximately MK13 billion) loan facility to support sustainable agriculture for socio-economic development and poverty reduction in Malawi.
The facility, which was provided under the Kulima program, aims to enable the Government of Malawi and the private sector to better address the challenges triggered by Covid-19 and global energy shocks, among others.
The Kulima program supports the transformation of the agricultural sector from production to commercialization, in particular by improving access to medium and long-term financing by organizations of small and medium producers and agribusinesses.
Speaking after the signing ceremony, which took place at the Bingu International Convention Center (BICC) in Lilongwe on Friday, EIB Vice-President Thomas Ostros said the loan demonstrates his institution’s commitment to supporting high-impact private and public investments across Malawi.
“And that includes improving access to finance for smallholders and businesses and addressing the challenges of climate change. Malawi is a key country of intervention for the EIB in Africa and the excellent cooperation with Malawian partners has transformed lives and strengthened priority infrastructure investments,” said Mr. Ostros.
He added: “My finance and technical colleagues and I look forward to discussing how to build economic resilience in the face of existing and new challenges, and improve the impact of future EIB engagement in Malawi. .
The European Union (EU) Ambassador to Malawi, Rune Skinnebach, said supporting sustainable agriculture is an important driver of development and poverty reduction in Malawi and should be at the heart of all efforts in favor of sustainable rural development and an inclusive growth nation.
Skinnebach said agriculture will remain central to EU efforts to contribute to a greener and more resilient Malawi.
“We are, of course, aware of the economic challenges facing Malawi, which in some cases require decisions on the allocation of public funds that will inevitably affect the performance of the agricultural sector. In this, I agree with the view of President Dr Lazarus McCarty Chakwera expressed earlier this week that private sector investment in agriculture is essential,” he said.
Skinnebach added, “This is recognized as part of the first pillar of Malawi 2063, striving for an optimally productive and commercialized agricultural sector. But to achieve this, agricultural entrepreneurs in Malawi need practical and financial products that take into account the specificities of the agricultural production cycle. I am confident that through Kulima’s access to finance package, First Capital Bank will be able to meet their needs and expand its agricultural investment portfolio.
In his remarks, the Director of Aid and Debt at the Ministry of Finance and Economic Affairs, Nations Msowoya, commended the EIB for its unwavering support to the Government of Malawi in its efforts to transform the lives of smallholders.
Msowoya expressed the government’s assurance to provide the necessary checks and balances throughout the implementation phase of the program.
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