The European Investment Bank (EIB) and National Bank of Malawi (NBM) have a joint facility for EUR 30 million for lending to customers to facilitate purchase, construction, renovation and extension of warehouses and agristorage assets. The facilities under this loan will be called “grain storage assets”.
What is an Agristorage Facility?
It is medium to long term financing provided by the Bank to eligible
customers to facilitate purchase, construction, renovation and extension
of warehouses and grain storage assets.
What is the purpose of the facility?
• To increase the grain storage and warehousing space and capacity in Malawi.
• To provide relatively lower cost and long term finance which is not usually available in the country.
• To facilitate the deepening of the Agriculture commodity exchange market in Malawi.
• To facilitate availability of easily accessible third party grain storage in the country.
Projects to be financed by Agristorage Facility
Tangible new investments or expenditures undertaken by eligible Beneficiaries, which can be identified in terms of location, design and benefits, carried out recently, and not completed before 6 months prior to the date of the application for finance. This includes investments in working capital towards construction of the warehouses or grain storage assets.
Investments and expenditures eligible for allocation of funds, as part of the projects by beneficiaries, include:
1. Purchase, renovation or extension of tangible assets, that is, warehouses, silos etc.
2. Financing of land purchase, which is technically essential for the agro investments for up to 30% of total Project cost.
3. Purchase of patents and licenses where necessary for the technical implementation of the Project.
Who can benefit?
• Private sector enterprises defined as an entity engaged in an economic activity, irrespective of its legal form; thus encompassing family firms, partnerships, companies and associations regularly engaged in agro-business.
• NBM reserves the right to determine who qualifies as an eligible beneficiary.
Loan amount that can be extended to final beneficiaries
• $1 million to $5 million per applicant.
• Customers have to demonstrate having put in owners contribution in the project.
Term of the loan to final beneficiaries
• The loan repayment period is a minimum of 4 years and a maximum of 7 years.
• The loans have a moratorium for the construction period of the financed grain storage assets of up to 24 months.
How much will it cost?
• We offer competitive pricing, with interest rates of around 7.5% fixed per annum.
• There is also a one-off fee for arrangement and appraisal.
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