Listed seed producer, Seed Co Group, has started drawing down on the US$25m loan facility the group secured from PROPARCO six months ago.
The seven-year loan from the French firm is expected to provide the company with liquidity to finance the group’s expansion projects in Zimbabwe and Zambia.
The amount from PROPARCO, which is Agence Française de Développement’s private sector financing arm, would be shared equally by Seed Co Zimbabwe and Zambia.
Seed Co’s group chief executive officer, Morgan Nzwere, told Business Times that the loan would help the company to ramp up production.
“We have begun drawing down the US$25m from PROPARCO with Seed Co Zimbabwe utilising it on its drier and other operations using its US$12.5m tranche and Seed Co Zambia moving towards expanding its operations using its portion,” Nzwere said.
Seed Co Zimbabwe set up its dryer plant in 2019, meant to help the drying of its maize and maize seed.
Maize farmers would dry their crop in Stapleford at a fee.
PROPARCO said the loan would allow Seed Co to finance a corn dryer in Zimbabwe which will double the harvests of farmers (one in the summer and one in the winter) and help improve efforts to address the climate risk.
Seed Co’s dryer project is expected to create 95 additional direct jobs and should support some 14,000 indirect jobs.
The installation of a corn drying unit by Seed Co will allow external farmers to harvest their wheat earlier in the year—May or June instead of September—thereby reduce losses due to disruptions in rainy seasons.
This investment will also contribute to reducing the vulnerability of agriculture to climate change.
In addition, the investments in research and development financed will develop varieties that are more resistant to weather conditions.
The project’s impact will contribute to Sustainable Development Goals which are zero hunger, decent work and economic growth and climate action.
PROPARCO has, for more than four decades, been financing and supporting companies and financial institutions in Africa, Asia, Latin America and the Middle East.
It has also been focusing on the key development sectors such as infrastructure, mainly for renewable energies, agribusiness, financial institutions, health and education.