EIB Global partners with ZICB to mobilise €30 million for Zambia’s agriculture sector

This article is published in association with European Investment Bank.

• Agreement will facilitate access to finance and markets for agri-food SMEs that in turn support a wide base of smallholder producers who supply them.
• EIB Global will provide €15 million (ZMW 388 million) which ZICB shall match, under the Agri Value Chain Facility.
• EIB Global has worked with Zambia since 1978 with over €1 billion (ZMW 25.7 billion) invested in projects across the public and the private sector.

The European Investment Bank’s international partnerships and development arm, EIB Global, and Zambia Industrial Commercial Bank Ltd (ZICB) have today signed an agreement to mobilise a combined €30 million (ZMW 767 million) to support private sector development in the country’s agricultural sector. The announcement was made during the ongoing EU-Zambia Lobito Corridor Business Forum in the presence of Zambian President, Hakainde Hichilema and EU Commissioner for International Partnerships, Josef Síkela.

The deal signed between the two banks will allow for on-lending to eligible SMEs active in the agriculture value chain. It will facilitate access to finance and markets for agri-food SMEs that in turn support a wide base of smallholder producers who supply them.

The agreement with ZICB is one of 3 agreements with Zambian banks under the EU-funded Agri Value Chain Facility aimed at supporting SMEs in agriculture and aquaculture value chains. The support entails long term funding, a risk sharing facility and provision of technical assistance.

ZICB Chief Executive Officer Ngenda Nyambe said: “Supporting the growth of agri-food SMEs and smallholder farmers through this financing facility will help Zambia safeguard the progress being achieved in the agricultural sector. Our partnership with EIB Global will enable ZICB to provide affordable financing that creates jobs and supports sustainable livelihoods across the agricultural value chain, in line with the Government’s long-term goal of transforming Zambia into a leading regional agricultural hub.”

EIB Vice President Karl Nehammer stated: “The agricultural sector contributes significantly to Africa’s GDP and is crucial for poverty reduction and food security while being a key driver for trade and job creation. We are supporting Zambia to create an environment that is attractive to private sector investment in agriculture. The goal is to ensure availability of finance to grow the whole agriculture value chain from smallholder farmers all the way to large enterprises.”

EU’s Commissioner Síkela added: “With Global Gateway, we are helping our projects to obtain access to credit, because it is essential to drive economic development. This project will empower farmers and agri-entrepreneurs to invest in their productivity, resilience and modernisation. This will create new jobs. The initiative is part of a wider Team Europe–Zambia partnership for a more efficient agri-food system.”

At least 30% of the funds will specifically target businesses led/owned by women. Female farmers in developing countries receive less than 10% of agricultural finance and in Zambia, nearly half of female managed SMEs identify access to finance as a top challenge. Women form the bulk of the labour force in the agricultural sector.

Aside from providing funding, the investment by EIB provides capacity building to the ZICB team to enhance their gender responsive lending strategies and further increase its outreach in the agricultural sector. The agreement also provides a risk sharing facility of €4 million (ZMW 103 million), supported by a grant from the European Commission making it less risky for ZICB to lend to SMEs in the agricultural sector often affected by climate change.

EIB Global’s support to Zambia also involves a $110 million (ZMW 2.45 billion) commitment to strengthen agricultural development through a credit line to international commodities company ETC Group (ETG) for farm logistics and infrastructure projects in sub-Saharan countries including Zambia.

The European Investment Bank has worked with Zambia since 1978 supporting both the public and private sectors. Over €1 billion (ZMW 25.7 billion) has been invested in various projects spanning renewable energy, transport, water and SME support.

Background information

About EIB Global

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that contribute to EU policy objectives.  

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, and a key partner of Global Gateway. EIB Global aims to support €100 billion of investment by the end of 2027 — around one-third of the overall target of this EU initiative. Within Team Europe, EIB Global fosters strong, focused partnerships alongside fellow development finance institutions and civil society. EIB Global brings the EIB Group closer to people, companies and institutions through offices across the world. High-quality, up-to-date photos of the organisation’s headquarters for media use are available here.

About ZICBZambia Industrial Commercial Bank Limited (ZICB) was incorporated on 31 August 2017 and officially commenced operations on 1 August 2018. The Bank is wholly locally owned, with its main shareholders being the National Pension Scheme Authority Investment Holdings (NAPSA-IH), the Industrial Development Corporation Limited (IDC), and the Workers’ Compensation Fund Control Board (WCFCB).

ZICB’s mandate is to promote Zambia’s economic development by supporting the industrialisation and commercialisation of MSMEs and local corporate enterprises.

The project is integrated in the European Union Programme “Support to the Sustainable Commercialisation of Zambia’s Smallholder Farmers” by providing the loan to ZICB together with a EUR 4m risk-sharing facility (RSF). This EU programme aims to support the Government of Zambia’s policy objectives by supporting business-oriented smallholder farmers and enabling them to graduate from low productivity, subsistence-based agriculture to more diversified and market-oriented practises.