The agreements comprise two concessional credits of K117 Billion for the Shire Valley Project, K69.4 Billion for the Agriculture Commercialization Programme and a K4 Billion grant from the Global Environmental Facility.
Speaking during the signing ceremony in Lilongwe, visiting World Bank Country Manager for Malawi, Tanzania and Burundi Bella Bird, explained that the projects have potential to transform the Shire Valley by setting up gravity fed water schemes.
Bird who described the signing agreements as historic, said that the project will also support producers to further commercialize and diversify agriculture within the Shire Valley.
According to her, the Bank expects to see increased areas of land under irrigation; high levels of production both in sugar and other crops which will in the end make more food available on the market and increase farmer’s profitability.
The Agriculture Commercialization Project will support up to 300 productive alliances and partnerships among producers, private and public sectors to diversify and link farmers with markets.
She pointed out that if the project moves well into implementation, the country will see some considerable benefits in terms of agricultural growth.
“This has been proven to be a very successful approach in other parts of the world and I think if the project moves well into implementation, then Malawi will start to see some very considerable benefits in terms of agricultural growth,” enthused Bird.
She stated that the project is also making available a credit line to famers to close the gap that is often seen in their ability in agro-based businesses in accessing finance to grow their ventures.
Finance Minister Goodall Gondwe said activities of the programme would directly address the National Export Strategy’s priority areas of developing the country’s productive base of farm and agribusiness products, and foster export competitiveness.
He further noted that the agreement has demonstrated World Bank’s commitment to Malawi’s development, and its goals of ending poverty and promoting shared prosperity.
He concurred with the Bank’s Director that if well managed the economic returns of the programme will make Malawi food secure.
“The STVP does not only have a potential of being a bread basket for the entire country, but also an important source of livelihood for Malawians in the Shire Valley.
“Learning from the back to back floods and drought of 2015 and 2016, we are convinced that the STVP is vital to build resilience to climate shocks,” explained Gondwe.
The 14 year programme which will run from 2017- 2023 targetting all districts in Malawi, will also improve the sustainable management and utilization of natural resources.