KAMBADWE FARM PROJECT

Project description

Kambadwe farm project is located in Chikwawa District, Southern Malawi. The district is strategically located along the Shire River, the only outlet of Lake Malawi, giving guaranteed access to water for irrigation farming. The project seeks to embark on commercial irrigation farming venture growing Soybeans, Groundnuts, Sorghum and Mangoes, cultivated throughout the year.

The project will be operated by a local cooperative, the Kambadwe cooperative, which plans to develop the commercial irrigation farm on a total land area of 168 hectares, with total irrigable land area of 111.62 hectares, representing 66% of the total farm land. This will allow the Cooperative to produce high quality agricultural commodities year-round, regardless of weather conditions.

The project is seeking an investment partner to contribute additional capital through equity or loan or off-taker pre-financing.

The Kambadwe farm project is being promoted under the Shire Valley Transformation Programme (SVTP). This is a 14 year (2018-2031) a government of Malawi initiative aimed at transforming the Shire Valley in Malawi into a productive and resilient agricultural hub. It aims to irrigate about 43,000 hectares of land with water abstracted from the Shire River and conveying it by gravity to the irrigable area in Chikwawa and Nsanje Districts through canals. The World Bank, the African Development Bank, and the Global Environment Facility fund the programme. The investment financial resources will be used to develop the land, procure irrigation infrastructure, farm equipment and inputs for crop production.

Financial requirements

Total project costs are estimated at EUR 1.7 million (US$ 1.8 million)

Funding Breakdown:

• Shire Valley Transformation Programme (SVTP) Grant: EUR 1,263,638 (US $1,359,432.00) which contributes 75% of total financing.
• Remaining Funding Gap: EUR 436,362 (US$ 440,568) equivalent to 25% of total financing to be secured through loans, or off-taker pre-financing or equity

Proposed investment model

• Equity-based investment for revenue generation
• Investment Cost per Hectare: EUR 9,960 (US$ 10,714)
• SVTP Contribution per Hectare: EUR 7,746 (US$8,333/ha)
• NPV US$ 775,441
• IRR (5) 19%
• EBIT (US$) 446,287
• Divident per hectare (US$) 2,279
• Dividend per member (US$) 201

Contact

The Project Coordinator

Shire Valley Transformation Programme

16 Chilembwe Road, Namiwawa

P/Bag 379

Chichiri

Blantyre 3

Malawi

E-mail: info.doi@svtp.gov.mw

Website: doi.gov.mw/doi-projects/svtp/