18 November 2013
European Investment Bank supports EUR 30 million agriculture sector investment initiative in Malawi
The European Investment Bank, Europe’s long-term lending institution, will provide EUR 15 million for investment by export focused agricultural companies in Malawi under a new lending initiative. The lending programme will be managed by First Merchant Bank (FMB) who will also provide EUR 15 million under the scheme.
The new initiative represents the first European Investment Bank engagement in Malawi since 2012 and the reengagement of international financial institutions in the country. The targeted lending programme will focus on the export focused agricultural sector, and strengthen the government’s policy to diversify exports and increase exports. At present, tobacco exports account for more than half of total Malawian exports.
“Agriculture is the backbone of Malawi’s economy and new investment by export driven small and medium sized business finance is essential for creating new jobs and economic growth. The European Investment Bank is pleased to resume engagement in Malawi as part of our broader engagement to support private sector investment across Southern and Eastern Africa. This new lending initiative with FMB further supports the diversification of economic activity in Malawi and will contribute to improved processing of agricultural products prior to export." said Pim van Ballekom, European Investment Bank Vice President.
“FMB, as one of the leading financial services groups in Malawi recognises the importance of supporting private sector investment. This new credit line with the European Investment Bank will benefit export driven agricultural firms and pass on the financial advantage of EIB funding to local companies.” said Dheeraj Dikshit, Managing Director of FMB Malawi.
"Increased investment by private sector companies processing agricultural produce can enhance exports and create jobs in Malawi, given the policy space required for the private sector to function efficiently. This new lending initiative by the European Investment Bank demonstrates Europe’s strong commitment to supporting efforts towards achieving such efficiency and hence sustainable economic growth in Malawi as stipulated in the country's national development strategies. The European Investment Bank plays a key role in supporting long-term investment across Africa and I am pleased that it has increased its activity here in Malawi. With over 37 years of trade and development cooperation between the European Union and Malawi, the EU continues to be one of Malawi's longest standing development partners, providing roughly € 300 million annually in development assistance to Malawi.” said Ambassador Alexander Baum, head of the Delegation of the European Union to the Republic of Malawi.
Companies being supported by loans from the initiative will benefit from longer term loans than would normally be available. Training has already been provided to local staff to improve awareness of social and environmental standards required by the European Investment Bank engagement.
Earlier this year a large scale water and sanitation investment supported by the European Investment Bank and the European Commission in 2008 was inaugurated. This will provide clean drinking water and sanitation facilities to more than 720,000 people in Blantyre and Lilongwe.
The European Investment Bank has been active in Malawi since 1977 and provided nearly EUR 170 million for a broad range of investment for water and energy infrastructure and private sector engagement in the cement, sugar and tea industries, as well as credit lines for local companies.
The European Investment Bank:
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
European Investment Bank: Richard Willis, +352 621 555 758, firstname.lastname@example.org
FMB: Sylvia Nankwenya-Mataka, +265 1 823 524 / 888 211 112, email@example.com