Honey Production and Collection Location Manica/Sofala Province

Honey production and collection

Location Manica/Sofala Province/Lower Zambezi Provinces –

Chimoio Headquarters sponsored by V&M Trading

Project investment size $1.1 m investment plus working capital of $0.5 m ( Yr 1) increasing to $1.3 m (yr 4) for input finance/crop purchase costs

Project IRR (10 years) 16% (regional sales) – 38% (Japanese market).

Model projects overall IRR of 28%.

Summary The project intends to capitalize on existing honey production in the Beira Corridor area proposing distribution of hives, training of collection agents and the establishment of a processing/storage centre in Chimoio. The intention is to exporting organic honey, involving as many as 25,000 families.

Markets Local, Regional, International (eventually targeting the premium Japanese market.) International export market is in excess of $700 million for the top 10 importers.

Supporting infrastructure Central storage, hives, trained collection agents, management and transport (container from Beira port.) Value-addition Currently honey is largely consumed in the region of production. Access to a managed hive system will increase honey production and quality allowing for access to premium price export market.

Type of financing required CapEx $1.1 m Equity/Grant

Working Capital (year1 -4) $0.5 - $1.3 m Bank Facility

Social and economic benefits In addition to improving farm income, added benefits will be the distribution of proper hives, thereby avoiding the use of tree bark which has killed many trees in the area, as well as training in proper collection techniques which will improve quality and standards.

10,000 farmers to be trained and 500 tons of honey collected. 25,000 families could eventually be involved in managing hives and collecting honey.

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N/A – collection area covers the majority of the Beira Corridor region.

Benga Coal Fresh Produce Supply Venture Location The Lower Zambezi Valley Project investment size $3.7m Equity Return (IRR) 15%-20% Summary 300 ha of irrigated fresh produce and grains to supply the growing mining industry and the local milling companies within the Lower Zambezi Valley region.

A commercial farming unit, supported by small scale producers will provide the backbone of the vegetable and grain production function. A pack house with additional marketing functions will perform the ex-farm gate functions.

Up to [500] associate farmers will be formally contracted to supply certain products after they have been selected, trained and evaluated. The candidate small scale associate producers will be selected from the community development programs once they have proven their commitment to apply good practice principles in their fields. Markets Benga is one of several new large mines to open up in the area, leading to a large increase in demand for food. At the moment there is no capacity for this demand to be met by the local market.

To ensure short term financial feasibility an agreement in principle has been reached with the Riversdale Benga Coal Project which entails the delivery of all fresh vegetables for the project’s construction camp needs at competitive market prices.

In addition, a new grain milling company, AgriComp set up in the Tete area to serve the anticipated growth in demand is currently unable to source the correct quality maize from Lower Zambezi Valley farmers.

Supporting infrastructure Electrification (costs tbd)

Value-addition Packhouse on site. Type of financing required TBD Social and economic benefits More than 2,000 jobs created in the next 5 years. Partnership with Farming God’s Way to promote sustainable agricultural lifestyles for the community and informal training.

Up to 500 associate producers (smallholder farmers) to be contracted to supply the pack house.

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Envalor Limitade Location 70kms south of Enchope, Sussundenga district, Manica Province Project investment size $330 million Equity Return (IRR) TBD Summary 25,000 ha of sugar cane, sweet sorghum and dry beans.

Envalor aims to produce 150 million litres of fuel grade ethanol from sugar cane (primary feedstock) and sweet sorghum (secondary feedstock) to be sold to the export market with availability to the domestic market. 32 MW/h of electricity from high-pressure bagasse will also be produced with an estimated 22 MW/h used by the plant and the excess going to the national grid. Food production of 10,000 tonnes per annum of dry beans is also expected.

Markets Export market: potential to tap into increased demand due to EU ethanol deficit of up to 7.5 billion litres per annum by 2020. Supporting infrastructure Bulk water supply and power generation Value-addition Sugarcane to ethanol Type of financing required Commercial debt and equity Social and economic benefits 1,800 jobs created with a transfer of skills to previously disadvantaged communities as well as social and health care services and out growers.

Improved food security and opportunities for smallholder farmers to participate in production of 10,000 tonnes of dry beans.

Electricity generation could provide local farms and villages with a reliable power supply.

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Chemez Valley – Commercial /outgrower farm development

Location Manica Province

Project investment 400 ha smallholder and 450 ha commercial

Infrastructure requirement - $ 1.8 m

Commercial farm - $4000 per ha - $2.0 m

Small holder farm - $5000 per ha - $ 2.0 m

Working Capital – TBD depending on crop

Project IRR (10 years) 17 - 25% commercial, 14 - 20% small holder (unleveraged cash flow only IRR – depending on crop)

Summary The Chemez area is some 15-20 km north-east of Manica town, has good soils at about 700 metres above sea level with annual rainfall of about 900 mm. The Chemez River has good flows and off-take sites for both gravity fed and pumped irrigation with relatively low pumping heads/power requirement. Three commercial farms in the area cover about 3,000 hectares but only 100 ha are irrigated. Current diesel based pumping costs do not allow for commercial margins.

100 active small farmers actively operate small areas of irrigated crops and other rainfed crops. The prospect of year-round crop production of perennial and field crops using mainly gravity-fed irrigation systems provides the basis for the development. This will allow development of approximately 1,200 hectares of land under irrigation which can be spread between commercial and small holder farmers as well as provide local electrification.

The commercial farmers have indentified an area of up to 400 hectares suitable for small farmer development and are willing to provide technical and market access services should the area be developed to produce value-added crops such as banana, citrus and mangos and field beans. One commercial producer is already producing bananas under irrigation and achieving premium quality and yield for export in Zimbabwe via Sunspan.

Markets Mozambique, Zimbabwe, South Africa and later Middle East and Europe.

Supporting infrastructure To stimulate agricultural production in the area it is proposed to develop an already identified gravity fed irrigation system and connect to the electricity grid from nearby Casa Msika, commercial and small holder farm areas as well as adjacent villages.

Simple packhouses can be located near commercial production areas and service small producers as well. Several traders are creating commercial demand and are willing to assist in establishing production.

Value-addition The creation of an integrated farm system involving multiple commercial and small holder farmers will stimulate sustainable development based on both diversified food crops as well as high margin perennial crops. The establishment of export channels through Beira port will facilitate the export of other (fruit) crops.

The extension program can be used to mobilize the small holder effort and provide economies of scale as infrastructure development and farmer concentration provide for economies of scale.

Type of financing required For 1,200 hectares. The investment covers basic land development and may require additional funds for equipment and buildings.

Small holder Farm Dev $2.0 mln Grant/Soft Equity

Commercial Farm Dev $2.0 mln Equity/LT Loan

Infrastructure $1.8 mln Soft loan

Working Capital (year1 -5) $5.2 est. Bank Facility

Social and economic benefits The 400 hectares dedicated to small holder farming can support 400 farm families. The 450 commercial hectares can support up to 550 labourers if planted with fruit crops.

Packsheds/cold storage operations can provide additional jobs. Technical support based on a commercial production base will stimulate small holder production and local income sources. Many outgrowers are already growing some bananas and local production can be stimulated quickly resulting in rapid income growth. The stimulation of the farm hub will substantially increase local economic growth in adjacent villages as well as on farm. Map

Grown Energy Sugar Cane Out grower Program

Location Upper Zambeze province

Project investment size $15 mln - Field and Irrigation

$7 mln – Equipment and transport

$3 mln- Working Capital

Project IRR Cash flow:

12 % at 100 tons per ha and a $10 per ton operating margin

17% at 120 tons per ha and a $12 per ton operating margin

Summary A sugar cane outgrower project associated with the Grown Energy ethanol project development located in upper Zambeze province.

The project is expected to produce 110 million liters p.a. of anhydrous fuel grade ethanol through processing sugar cane and sorghum grown under irrigation utilizing water from the Zambeze River. In addition to ethanol, the project expects to produce 15,000 tonnes of vegetable protein, 200 tons of meat, generate 2 - 3 MW of excess electricity and produce 115,000 annual emission reductions credits.

The project is expected to cost $248.2M. The project has set aside 3,000 hectares of land for outgrower development and will enter into an offtake agreement with an organization representing up to 200 families each farming an area of 15 has on average. The outgrowers will grow sugar cane under contract with the mill based on established outgrower program models. An additional area of 600 – 700 hectares has been identified for food crop production with initial crops of rice in the summer and dry beans during the winter. Markets Europe under an off-take agreement with BP

Supporting infrastructure required Grown Energy will provide bulk water and electricity to the farming area. The project is close to the head of the Sena rail line for transport to Beira. A barge alternative utilizing the Zambeze is also being considered. Grown Energy will provide cane seedlings. Value-addition There is potential for farming families to earn as much as $15 – 20,000 p.a. from contract sugarcane farming. The project itself will cover over 20,000+ hectares and will be a major economic stimulus to the area. In addition the production of food crops on an additional 600 – 700 hectares will support the expected increase in demand for local food.

Type of financing required Irrigation/ Land development $15 mln Equity/Grant

Equipment $7 mln Lease/Loan

Working Capital $3 million Bank Facility Social and economic benefits The Grown Energy project expects to generate about 2,000 full time jobs. The outgrower project will employ 300 families who will see their incomes rise to upper middle class standards. In addition the project will produce ethanol for green energy utilizing what are currently considered marginal lands. GEZ will actively involve the local community by ensuring the success of the project in the long- term and provide for significant local job creation through knock on effects and will provide meaningful skills transfer. The land used by the project does not compete with food production and goes further by increasing available protein calories in the region. The use of sweet sorghum allows the project to produce, in addition to the ethanol, significant volumes of food in the form of soya and sheep.

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(1) Munda Munda Flood Control/Irrigation

(2) ‘Planalto’ Small holder Rice Storage/Milling/Marketing Project

Location Lower Zambeze province

Project investment size 1) $27 mln - Irrigation/flood control system rehabilitation

2) $0.75 mln – Capex producer coops

$2.7 mln – Capex storage/milling marketing organization

$1.6 mln- Peak working capital - yr. 3 of operation

Project IRR 1) Munda Munda Flood Control /Irrigation

- 1% (assuming OREO support)

2) Planalto rice storage/milling and marketing

- 12 %at 100 tons per ha and a $10 per ton operating margin

- 17% at 120 tons per ha and a $12 per ton operating margin

An extension program as discussed in the Family Sector Commercialization program would likely significantly increase yields and IRR’s in both projects.

Summary This project proposes to build on the rehabilitation of the colonial irrigation infrastructure in the Nante area near the Licungo River in Lower Zambeze province in 2 separate but related projects. The Munda Munda project improves the physical flood control, irrigation and drainage infrastructure and the social infrastructure of a well-functioning water users’ association. The project is being considered for part funding by the OREO program sponsored by the Netherlands government. This enables 5,000 farmers to cultivate one or two good rice crops and provide for food security and substantially increased incomes. The project proposes to enable controlled flooding, irrigation and drainage of 3,000 hectares. The scheme will operate mostly on gravity thereby reducing operating costs. The project can be combined with an extension program to promote greater yields, conservation farming techniques and crop rotation to allow for diversification in higher margin crops and provide for protein rich locally produced crops such as dry beans and oil seeds. Conversations with a Mozambican miller and marketer have commenced to provide technical support and marketing for the excess rice production. In addition the possibility of establishing a core/anchor commercial rice growing operation in proximity to the flood zone is being considered.

Markets Rice import substitution in central Mozambique starting with 6,000 tons and increasing as yields increase in excess of local consumption

Supporting infrastructure The existing flood control/irrigation infrastructure will be improved and required made to function for the benefit of local farmers. The extension program aims to improve market access and allow for increased yields. Due to the gravity nature of the system, electricity demands can be minimized. Value-addition The construction of the project is labor-intensive and will create 1,500 jobs. The project’s spin-off for the local economy creates another 300 jobs. On the national balance of payments, at least 6,000 tons of imported rice is substituted, without any consumer price difference.

Type of financing required Munda Munda: $15 mln – soft/equity

Planalto: $3.45 mln – soft/equity – grant

$1.6 mln – working capital

Social and economic benefits The water users’ association (WUA) will be strengthened as an institution, effectively establishing and enforcing rules and regulations for the use, maintenance and repair and financial management of the water infrastructure.

Approximately 3,000 small farmers will benefit directly from the Munda Munda system resulting in a direct economic improvement of as many as 30,000 family members.

The Planalto co-ops include up to 32,491 coop members (of which approx 60% are female) organized in 4 co-ops.

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: GEOGRAPHICAL AREA OF THE ONE -TIER AND TWO -TIER RICE CO -OPERATIVE ENTERPRISES IN THE PROVINCE OF ZAMBÉZIA .

: Nicoadala/NamacurraNicoadala / NanteNant Empresa1-tier Co-operative cooperativa enterprise de 1 Empresa1-tier Co-operative cooperativa enterprise de 1 Namacurra e grau grau CompraPurchase e andarmazenagem storage CompraPurchase e andarmazenagem storage

MopeiaMopei Empresa1-tier Co- operativecooperativa enterprise de 1 tier a CompraPurchase e andarmazenagem storage

60 k k m m NantNante 150 NicoadalNicoadala 40 km 35 k QuelimaneQueliman km Empresa2-tier Co-operativee cooperativa enterprise de 2 mMopeiMopeia grau ProcessamentoProcessing and salese venda

ZambeziaZambézia

0 30 120 km N