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Malawi signs K190 billion pact with World Bank

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The Government of Malawi and the International Development Association of the World Bank have signed three financing agreements totalling $260.59 million (about K190 billion).

The agreements comprise two concessional credits of $160 million [about K117 billion] for the first phase of Shire Valley Transformation Programme (SVTP) and $95 million [about K69.4 billion] for Agriculture Commercialisation Project, and a grant of $5.59 million [about K4 billion] from the Global Environmental Facility.

After signing the agreements on Friday, Minister of Finance, Economic Planning and Development, Goodall Gondwe, said he expects a lot from the SVTP.

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“We believe that, if well-managed, the economic return can be enormous. The SVTP does not only have the potential of being a bread basket for the entire country, but also an important source of livelihood for Malawians in the Shire Valley. Learning from the back to back floods and drought of 2015 and 2016, we are convinced that the SVTP will build resilience to climate shocks,” Gondwe said.

He also said he expects that the Agriculture Commercialisation Project will increase the commercialisation of agricultural value chain products selected under the project.

“This project is vital in increasing yield of selected commodities, linking them to markets and increasing their gross sales,” Gondwe said.

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World Bank Country Director for Tanzania, Malawi, Burundi and Somalia, Bella Bird, said the SVTP will improve agricultural production of the targeted areas.

“We all know the shire Valley as a productive area. We look to this project to help revamp productivity through reliable gravity-fed irrigation. In line with the newly-approved National Agriculture Policy, the project will promote agriculture diversification to crops other than sugar, which is dominant in the area,” Bird said.

The Agriculture Commercialisation Project is expected to improve access to finance through partial credit guarantee funds to financial institutions as an incentive to lend to the agricultural sector.

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