Forum yields US$1bn deals
The just-ended Malawi Investment Forum (MIF) has registered success as at close of business yesterday over US$1.1 billion investments were eminent of becoming a deal very soon.
Making the announcement at the closure of the forum, Ministry of Industry and Trade Principal Secretary Cliff Chinunda read out a communiqué which had details of the success story.
Chinunda said three known deals had been quantified with offers of over US$1.1 billion of investment.
The projects, which have reached a preliminary understanding according to Chinunda, included the Blantyre City Council MoU signing with the China-Zambia and China- Tanzania Friendly Cultural Exchange Programme for the combined implementation of 11 projects in Blantyre. The programme will be facilitated by the Chinese Government.
The other project is that of Briggs International, an American company, which will be signing an MoU with the Government of Malawi for the implementation of a multi-billion dollar rail system that will connect Lake Malawi down to
the Port of Nsanje onto the Zambezi River to the Indian Ocean by-passing the 36-kilometre rapids on the Shire River and therefore connecting Lake Malawi to the Indian Ocean without barges having to off-load their goods.
The project will give Malawi direct access to Sea.
Chinunda also said the Country-wide Group of Companies has also received preliminary funding consideration for the development of their five-star hotels in Blantyre and Chintheche respectively by three international financiers.
“A local company, called Atlas Energy, has received a commitment by an international financier for US$80 million to develop a 40 megawatts solar project in Malawi. A coal mining company, which has two mining projects in Rumphi and Nthalire, has met a Japanese company who are interested to further discuss the prospect. The foreign counterparts will supply the equipment while the local counterparts will provide the resource, if the deal goes through,” he said.
He further said China Railways No. 3 Engineering Group Company Limited has picked three projects which they intend finance and own.
The projects include Kamwamba Coal fired Power Station valued at US$600 million, Railway construction and rehabilitation worth US$250 million and Mangochi Airport which will be funded to the tune of US$250 million.
“The MoUs will be signed between the government and the China Railway by Thursday this week. More deals are being unraveled and the press will be updated as we continue the interactions,” he said.
Meanwhile, vice president of the US-based Overseas Private Investment Corporation (OPIC) James Polan has offered the country’s private sector with financing windows for long term projects that the country lacks, saying the country has not been benefiting from its available of resources.
Polan said companies that are eligible for financing only require to involve US companies in their project implementation or proposal saying financing ranges from US$500,000 to US$250 million.
“We are not here to compete with the local banks but we want to fill the gap that the local banks leave and that is in long term financing for projects at cheaper interest rates,” said Polan.
He disclosed that OPIC will be implementing a facility that entails loan guarantee to allow local banks give loans to entrepreneurs without collateral.
“We will be engaging a US organisation to train local banks on how they will be involved in this facility to ensure technical capability,” said Polan.
However, some indigenous companies have expressed concern over banks tendency to raise interest rates even when they get guarantee facility from institutions like OPIC.
But the OPIC vice president said the institution gives direct loans at the rates of around six percent, which is much lower than what the banks’ offer but said there will be a way to ensure its guaranteed loans to SMEs are at affordable rates.
Chief Executive Officer of National Bank of Malawi George Partridge said the forum has unlocked a lot of opportunities as his bank discussed with a number of international financing institutions to collaborate on financing investment.
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