Follow Us on Social Media!
WASHINGTON, D.C., December 17, 1999 -
The International Finance Corporation will lend US$10.3 million to help the Maragra Sugar mill resume operations that were shut down in 1984 in the midst of civil war in Mozambique.
The $52 million project, 70 km north of Maputo, will rehabilitate 6,200 hectares of cane fields as well as the sugar mill, which will produce up to 70,000 tons of sugar at full capacity. The sugar will be sold domestically, saving about $20 million spent annually on import of sugar.
The mill and plantations will employ up to 3,000 people at full production and support about 22,000 people living on the estate. It will develop marketing networks and create opportunities for outgrowers to supply sugar cane to the mill, with 1,500 hectares of land to be planted under this scheme by 2001. The rural infrastructure-including housing, schools, clinics, roads, electricity, and water supply-has already been upgraded. The project also involves upgrading the factory's air pollution control and waste water treatment systems so that the mill will operate in compliance with World Bank Group environmental requirements.
Mr. Tei Mante, Director of IFC's Agribusiness Department, said that Maragra was the first sugar company to be acquired and rehabilitated by a foreign investor in Mozambique after the end of the civil war and was a good example of partnering between a first class foreign investor and Mozambican private investors in a project with positive social impact. IFC's participation provides an anchor to the other financial institutions interested in financing the project and local short-term lenders, which see IFC's involvement as a signal of confidence in the future of the sugar sector in Mozambique.
Along with IFC, PROPARCO (the private sector lending arm of the French development agency, Agence Francaise de Développement), DEG (Deutsche Investitions und Entwicklungsgesellschaft, the German Investment and Development Agency), DBSA (Development Bank of Southern Africa), and EIB (European Investment Bank) are also providing funding to the project.
The project's sponsors are Illovo Sugar Limited, the largest South African sugar producer, and the Petiz family of Mozambique. Illovo is also the largest sugar producing group in sub-Saharan Africa with operations in Malawi, Swaziland, Mauritius, Kenya, and Tanzania. In 1997, Illovo entered into a joint-venture with the Petiz family, the original founder of the Maragra estate, and now owns half the company.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
Receive news and updates about IFC