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. Map 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. Map 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. Map 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.