Silverlands Ranching Limited (SRL)
Project description
On February 27, 2015 MIGA issued a guarantee of $16.2 million to reinsure coverage provided by the Overseas Private Investment Corporation (OPIC) to SilverStreet Private Equity Strategies Soparfi Sarl (the Fund), an agricultural fund focused on investing in sub-Saharan Africa. The coverage is for a period of 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
This new coverage replaces and supplements the reinsurance MIGA issued in May 2013 for the original investment in SRL, which included the acquisition of the Foresythe Estate. The Fund recently acquired a neighboring farm and intends increase its investment into the project to a total of $30 million over the next two years. SRL intends to put in place an experienced management team to improve Foresythe’s existing operations and to carry out an expansion plan that includes increasing the current cattle herd by roughly 10 percent each year over the next 10 years, construction of an earth dam to increase the area under irrigation from 350 hectares to 1,000 ha, and addition of an abattoir and feedlot.
The project’s main development objective is to improve agricultural sustainability and increase livestock productivity through the introduction of more efficient processes and technology. SRL intends to improve and expand the operation of the current farm, introduce best practices in farming, as well as make additional capital investments in order to increase the current cattle herd to more than 14,000 head by 2023. Enhanced productivity of the livestock production system should boost local employment, taxes, and improve overall food security.
Promoting agricultural growth and diversification has been identified as a key development challenge in the World Bank’s Country Partnership Strategy for Zambia. The vast majority of the very poor derive their livelihoods from subsistence smallholder agriculture and productivity remains low. MIGA’s support for this investment is also aligned with the Agency’s priority of promoting investment into countries eligible for concessional financing from the International Development Association.
MIGA’s support to OPIC is in accordance with MIGA’s mandate to cooperate with national entities of its member countries, as stated in MIGA’s Convention.