The Sunday Mail
Enacy Mapakame
DEPOSIT-taking micro-finance institution African Century Leasing has concluded a US$5 million deal with South Africa’s Meeco Group for provision of solar-powered equipment to improve rural agricultural production.
ACL chief executive officer Mr Stanley Matiza said the money would buy solar-driven water pumps and other renewable energy-based farming implements.
Under the deal, Meeco, who have successfully implemented a similar project in South Africa, will provide technical expertise.
Meeco is a clean energy services and solutions provider.
The project will initially target rural schools before expanding to include clinics and hospitals, clubs, groups and small irrigation schemes.
The facility will attract a 10 percent interest rate per annum.
However, no collateral is required as the company is banking on asset financing, which guarantees revenue generation from the agricultural produce.
“We are starting this project with schools in mind and small irrigation schemes in rural areas. We believe solar energy for agriculture can help alleviate food shortages, schools can produce their own food to sustain themselves and surrounding communities,” said Mr Matiza last week.
“Our funders and us believe more needs to be invested towards agriculture, especially now in the face of climate change and the effects of the drought on the sector. It supports many downstream industries.”
Agriculture is Zimbabwe’s economic mainstay, with 70 percent of the population directly or indirectly employed in the sector, according to the Zimbabwe National Statistics Agency.
It is believed that the local manufacturing industry draws 60 percent of its raw materials from agriculture, with smallholder farmers accounting for over 80 percent of domestic food production.
Agriculture also contributes around 30 percent of export earnings and about 19 percent of GDP, according to the 2016 National Budget.
However, the sector has in recent years seen a marked decline in output due to inclement weather conditions, inputs shortages and poor funding.
This year, about three million people will need food aid following Zimbabwe’s worst drought in 25 years, which is expected to sharply reduce harvests.
Mr Matiza said ACL, which also provides asset financing for SMEs, has a bias towards agriculture and is working with sugar cane farmers in Chiredzi and banana producers in Honde Valley.
The Chiredzi project is a US$2 million investment.
“We are assisting them with transportation of produce in these two projects,” he said, adding that more development finance institutions were willing to chip in to help mitigate the effects of drought.
Agriculture is projected to grow by 1,8 percent this year, according Treasury.
In the 2016 National Budget, Finance and Economic Development Minister Mr Patrick Chinamasa said US$16 million had been committed to capacity building in agriculture for communities to better cope with the negative impact of climate change.
Emphasis will be on irrigation around the country.
