Land Bank re­ceives an­other $300m loan boost

The Star Early Edition - - LIFESTYLE - Sandile Mchunu

THE LAND BANK yes­ter­day re­ceived a $300 mil­lion (R3.87 bil­lion) loan fa­cil­ity with a 10-year ma­tu­rity pe­riod.

The fa­cil­ity is backed the Mul­ti­lat­eral In­vest­ment Guar­an­tee Agency (Miga), the po­lit­i­cal risk in­surance and credit en­hance­ment arm of the World Bank Group.

The spe­cial­ist agri­cul­tural lender said loan was fa­cil­i­tated by Stan­dard Char­tered, which will also act as a book run­ner.

The Land Bank said the funds would play a huge role in sup­port­ing the farm­ers in South Africa.

In April the Land Bank also re­ceived a R1.3bn loan fa­cil­ity from the World Bank which has a 25-year ma­tu­rity pe­riod to sup­port its core busi­ness of pro­mot­ing agri­cul­tural pro­duc­tiv­ity, growth and job cre­ation as well as pro­mote food se­cu­rity in South Africa.

Land Bank chief ex­ec­u­tive Tshokolo Petrus Ncho­cho said the deal rep­re­sented a vote of con­fi­dence in the work be­ing un­der­taken to grow the agri­cul­tural sec­tor.

“Se­cur­ing sus­tain­able fi­nanc­ing is vi­tally im­por­tant for us to give ef­fect to our man­date of cre­at­ing greater ac­cess to the agri­cul­tural sec­tor and ul­ti­mately bring­ing more land un­der pro­duc­tion to en­sure food se­cu­rity,” Ncho­cho said. “This year alone, we have worked with the World Bank Group to se­cure a R1.3bn line of credit to help emerg­ing farm­ers and we are now proud to be work­ing with Stan­dard Char­tered and Miga to fur­ther our ef­forts to grow the sec­tor.”

Ncho­cho said the Land Bank be­lieved that the part­ner­ships would go a long way in en­sur­ing the avail­abil­ity of sus­tain­able fi­nance so­lu­tions to deepen our de­vel­op­ment im­pact.

In the midst of the dev­as­ta­tion drought last year, the state-run Land Bank said that farm­ers could ap­ply for con­ces­sional loans to help see them through the lean sea­son.

The bank, which fo­cuses on the agri­cul­ture sec­tor, said at the time that it had raised R400m from the gov­ern­ment-owned In­dus­trial De­vel­op­ment Cor­po­ra­tion) for drought re­lief mea­sures.

It said farm­ers in prov­inces de­clared drought dis­as­ter ar­eas – KwaZulu-Na­tal, Mpumalanga, North West, Lim­popo and Free State – could ap­ply for the loans im­me­di­ately.

The Land Bank said the new deal se­cured a long-term dol­lar funding for Land Bank at very com­pet­i­tive terms achiev­ing re­duced over­all cost of bor­row­ing and di­ver­si­fi­ca­tion of fi­nanc­ing sources.

It said the fa­cil­ity had a door-todoor ten­ure of 10 years and would help in­crease long-term liq­uid­ity for the ben­e­fit of the agri­cul­tural sec­tor in South Africa.

The lender said the loan was de­nom­i­nated in dol­lar terms; how­ever, the fi­nanc­ing struc­ture will en­able Land Bank to ob­tain liq­uid­ity in South African rand for its lend­ing op­er­a­tions.

The Land Bank has been serv­ing the needs of both com­mer­cial and emerg­ing farm­ers for 105 years. It pro­vides tai­lor-made fi­nan­cial ser­vices to its clients. The ser­vices en­able farm­ers to fi­nance land, equip­ment, agri­cul­tural in­fras­truc­ture as well as the im­prove­ment of as­sets and pro­duc­tion cred­its.

Saif Ma­lik, head of global bank­ing, Africa, for Stan­dard Char­tered, said they were happy to have fa­cil­i­tated the funding of a key sec­tor like agri­cul­ture.

“We are de­lighted with our part­ner­ship with Land Bank and Miga in a deal that will go a long way to sup­port agri­cul­ture pro­duc­tion and mod­erni­sa­tion in South Africa. This is our sec­ond MIGA sup­ported fi­nanc­ing in South Africa and third glob­ally, which is a demon­stra­tion of our com­mit­ment to South Africa and the African con­ti­nent.”

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