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.