AfDB Approves $47.09m Grant For Agro-industrial Processing Zone In Mozambique

(AFRICAN EXAMINER) – African Development Bank (AfDB) Group has approved a $47.09 million grant for the first phase of the Pemba-Lichinga Integrated Development Corridor, a Special Agro-Industrial Processing Zone in Mozambique.

Special Agro-Industrial Processing Zones (SAPZs) are integrated development initiatives designed to concentrate agro-processing activities within areas of high agricultural potential to boost productivity, integrate production, processing, and marketing of selected commodities.

These zones will enable agricultural producers, processors, aggregators, and distributors to operate in the same vicinity to reduce transaction costs and share business development services for increased productivity and competitiveness.

Coupled with bringing adequate infrastructure (energy, water, roads, ICT, etc.) to rural areas of high agricultural potential, SAPZs will attract investments from private agro-industrialists/entrepreneurs to contribute to the economic and social development of rural areas.

The grant, from the African Development Fund, will help improve agricultural productivity and agribusiness development in the Niassa province by advancing institutional capacity, skills, and entrepreneurship to spur agricultural value chain growth.

The project will pilot improved policy and development coordination between the Niassa province and national departments, especially with the Ministry of Industry and Commerce and the Ministry of Agriculture and Rural Development.

The initiative is in line with the Mozambique National Development Strategy 2015-2035, which seeks to improve the living conditions of the population through structural transformation of the economy and expansion and diversification of the production base. It is consistent with the concerted efforts of the international community to support Mozambique to promote inclusive economic growth and peacebuilding in the north.

The project also aligns with the African Development Bank’s Country Strategy Paper 2018-2022 for Mozambique, with a focus on the northern provinces, and the Bank’s Feed Africa Strategy for agriculture transformation.

Mozambique’s Minister of Industry and Trade, Carlos Mesquita described the project as a “game-changer” that would transform the economy, promote social inclusion and foster peace by tackling important industry enabling factors such as infrastructure for development.

AfDB’s Country Manager for Mozambique, Cesar Augusto Mba Abogo explained that the zones are shared facility aimed enabling agricultural producers, processors, aggregators and distributors to operate in the same neighborhood to reduce transaction costs, share business development services and increase productivity and competitiveness.

He added that the SAPZs can promote the participation of small producers in value chains and value addition, thus offering an inclusive development model.

Notably, the project will build on a long list of AfDB’s interventions in northern Mozambique to provide infrastructure and unlock the agricultural potential of the host corridor. The most recent of these bank-supported projects are the N13 Cuamba-Muíta and the N14 Montepuez-Ruaca roads linking the provinces of Cabo Delgado and Niassa.

In a similar development, the Sustainable Energy Fund for Africa (SEFA), which is managed by the AfDB, has also approved a $1 million grant to facilitate Botswana’s transition to clean energy.

SEFA is a Multi-Donor Special Fund that aims to unlock private sector investments that contribute to providing universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the bank’s New Deal on Energy for Africa strategy and Sustainable Development Goal The technical assistance project supports the Government of Botswana in closing critical gaps in policy, regulatory and legal frameworks, which were identified at the African Energy Market Place (AEMP 2019). These include the introduction of least-cost planning, reduction of adverse environmental impacts and support for increased private sector participation in renewable energy (RE) generation investments.

Some of the notable outputs from the project include a national Grid Code, Electricity Cost of Service Study (CoSS) and licensing framework to regulate power sector activities. The outputs from the project will contribute towards the implementation of Botswana’s first Integrated Resource Plan (IRP), thus facilitating investments in new solar PV and wind generation capacity, amounting to at least 100MW and 50MW, respectively, by 2030.

Through its support for the further development of the renewable energy generation sector in Botswana, the project also contributes to the Mega Solar initiative, launched in 2021 in collaboration with Namibia and development partners, with the aim of building renewable energy capacity in the two countries, to enable electricity exports to the rest of the region.

Acting Director for Renewable Energy and Energy Efficiency at the AfDB, Dr. Daniel Schroth said the project which was conceptualised under SEFA’s Green Baseload component, will contribute to the development of essential building blocks to support Botswana’s energy transition.

Similarly, the Chief Operating Officer at the Botswana Energy Regulatory Authority (BERA), Duncan Morotsi noted that it has been a long journey to access this AfDB grant facility.

“The approval is a great step forward in the regulator’s quest to facilitate independent power producers (IPPs), renewable energy sources and cost reflective tariffs in Botswana. It was worthwhile pursuing this technical assistance from the AfDB”, he stressed.