World Bank’s MIGA Backs Volga Farming’s Sustainable Agriculture Investment in Russia
World Bank’s MIGA Backs Volga Farming’s Sustainable Agriculture Investment in Russia
WASHINGTON, DC, and Penza, Russia, October 13, 2011 — Volga Farming announced today that the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, is supporting the company’s agriculture investment in central and southern Russia. Volga’s investment will convert unproductive agricultural land into modern production, increase soil fertility, and result in an expansion of agricultural production in the country. MIGA’s guarantee is providing $49.5 million in coverage for the project.
Volga Farming’s investments will establish a farming operation in line with best international standards in Russia’s black-earth region. The company will lease 90,000 hectares of agricultural land and operate farms and related agribusiness to produce, store, process, and sell grain and other crops such as wheat, barley, sunflower, and peas. Initially the food will be sold in the do-mestic market; but as the project proceeds, any surplus will be exported.
The project’s success will have an impact on regional development through the recruitment of local personnel; the repair and maintenance of roads; and sourcing of processing, storage, logistics, and trade industries. Importantly, the project has met MIGA’s performance standards that address issues including land rights, environmental and social impacts, and labor conditions.
“MIGA’s team has given us invaluable help throughout their detailed due diligence process and we are proud to move forward on a project that meets their standards,” said Henrik Jönsson, CEO of Volga Farming. ”We view MIGA’s support as a mark of quality that allows us to invest smartly, attract a broader investor base , and maintain a reduced risk profile.”
MIGA’s Executive Vice President Izumi Kobayashi noted, “The World Bank Group recognizes a need for the Russian Federation to continue on its path of global competitiveness in traditional economic sectors, including agriculture. We’re pleased that this project will help the country boost its food production, sustainably.”
Today, MIGA and Volga Farming formalized the contract of guarantee through a signing cere-mony in Paris.
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MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
MIGA Contact:
Mallory Saleson, MIGA
Tel: +1 202 473-0844
E-mail: msaleson@worldbank.org
Rebecca Post, MIGA
Tel: +1 202-473-1964
E-mail: rpost@worldbank.org
Cara Santos Pianesi
Tel: +1.202.458.2097
E-mail: csantospianesi@worldbank.org