Private financing sector arm Proparco issues US$25m loan to Seed Co to bolster food security

ZIMBABWE – Listed seed producing giant, Seed Co has received a US$25 million loan financing from French development financial institution Proparco, to strengthens food security in the region.

The seven-year support is divided into two tranches, each for US$ 12.5m, with a 7-year maturity.

According to Proparco, it will be channelled towards research and international expansion via a loan to Seedco Zambia.

Secondly it will include the construction of a corn dryer at its Zimbabwe operations, which will increase the production capacity, double farmers’ harvests and do more to address the climate risk.

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“By supporting Seed Co Group, whose activity is improving food security in the region by helping to increase agricultural yields, Proparco is contributing to the development of the economic fabric of the region.”

PROPARCO

Furthermore, Seedco is partly reducing its clients’ vulnerability to climate change, by developing hybrid corn varieties adapted to the climates in the regions where the Group operates and introducing shorter ripening cycles to make them more resistant to climate hazards.

On the economic and social front, the project should provide a million more people in Zimbabwe and Zambia with access to Seedco corn over the next five years.

The project should also contribute to creating 95 additional direct jobs out of a total of 475 jobs and support some 14,000 indirect jobs over the next five years.

“By supporting Seed Co Group, whose activity is improving food security in the region by helping to increase agricultural yields, ProParco is contributing to the development of the economic fabric of the region, job creation, the promotion of quality industrial facilities with high environmental and social standards and the adaptation of Sub-Saharan agriculture to climate change,” said ProParco.

Seed Co Group was set up as a cooperative in Harare (Zimbabwe) in 1940 and is the leading seed manufacturer in Africa.

The group selects, produces and markets hybrid field seeds, including corn, wheat, soja, sorghum, groundnuts, beans and cowpea.

The regional seed producer is set to delist from the Zimbabwe Stock Exchange (ZSE) by March 31 after listing on the newly formed US dollar-denominated Victoria Falls Stock Exchange (VFEX) and merger with its Zimbabwean unit.

So far, the Seed Co International (SCIL), has acquired a 95% stake in Seed Co Limited (SCL) through primary and secondary offerings.

ProParco has been working for 40 years to promote sustainable economic, social and environmental development.

It supports companies and financial institutions in Africa, Asia, Latin America and the Middle East whose activities contribute to job creating jobs and decent incomes, the provision of essential goods and services, and the fight against climate change.

In Mozambique the institution has formed a new partnership with commercial bank Société Générale Moçambique to support SMES.

The EURIZ portfolio covers an amount of 3 million euros prioritizing support to MSMEs owned by women and those active in the agricultural sector.

It will share the risk associated with financing very small, small and medium-sized enterprises (VSEs), thus increasing the bank’s ability to finance the economy.

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