Land Bank receives another $300m loan boost
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.”