JOHANNESBURG - The Land and Agricultural Development Bank on Thursday, announced the signing of a R900 million term loan facility secured through the German Development Bank (the KfW).
The Land Bank said that the facility, which has been priced in local currency with favourable terms, is set to provide a much needed boost to agricultural development in South Africa and supplementing the Land Bank's sources of transformational and development funding.
The facility features a 10-year amortising repayment period with a two-year repayment holiday, payable from March 2020 in 17 semi-annual instalments until 2028.
This will help to increase the bank's long-term liquidity for the benefit of the agricultural sector in South Africa.
Land Bank chief executive, Tshokolo Nchocho, said the facility will enable the Bank to continue supporting Greenfields projects.
"We are encouraged by the confidence investors [that] are showing in the important work we are doing to support rural development as well as in our ability to meet all commitments to key stakeholders," Nchocho said.
"With secure lines of funding such as this, Land Bank remains best positioned to drive productivity, growth and job creation as well as promote food security in the country."
KfW director for sub-Saharan Africa, Thomas Duve, said that the funding by KfW will be targeted at providing financing solutions to commercial farmers, and end-to-end business support for emerging farmers, specifically with a view to enabling access to long-term finance at competitive conditions.
During the past year, Land Bank secured similar funding facilities through the World Bank and its MIGA arm (in support of a long term commercial loan from Standard Chartered Bank and DZ Bank) in addition to Land Bank’s funding efforts in the local capital and debt markets.