China Development Bank provides $79 million loan for Hubei-Gaza Friendship Farm Expansion Project

In 2012, China Development Bank (CDB) provided a $20 million loan to Wanbao African Development Agriculture Ltd. (WAADL) — a private Chinese company that focuses on rice production and is considered to be the largest Chinese agribusiness company in Africa — for the Hubei Gaza Friendship Farm Expansion Project. CDB later increased the size of the loan to WAADL (or 万宝粮油 or 湖北万宝粮油有限公司) to $79 million. WAADL is owned by Wanbao Grain and Oil (51% equity stake) and China Agricultural Development (CAD) Fund (49% equity stake). Wanbao Grain and Oil is a private company based in Xiangyang that focuses on purchasing, storing, processing, sale, and logistics of grains and oil seeds. The Hubei Gaza Friendship Farm was first established in 2007 in Xai-Xai, the capital of Gaza Province, through an agreement between the Hubei Province and Gaza provincial governments. This agreement gave the Hubei Lianfeng Mozambique Company, LDA (HLMO Co., LDA), a Chinese state-owned company, an area of 300 hectares (ha) to produce rice in the Xai-Xai irrigation scheme. In 2011, management of the farm was turned over to WAADL, which had received a concession of 20,000 ha for a period of 50 years and announced that it would substantially expand the operations of the farm through a $198 million investment. The Hubei Gaza Friendship Farm Expansion Project involved the construction of a comprehensive agricultural-industrial facility that integrates farmland development, grain production, warehousing, processing and sales with a focus on rice cultivation supplemented by the cultivation of various crops. The project scope included an increase in the scale of the land under cultivation by the farm, the installation of agricultural machinery, and the provision of seeds, fertilizer and training to farmers. The ultimate goal of the project was to increase rice production in Mozambique and thereby reduce food insecurity. WAADL contracted the China National Chemical Engineering (CNCEC)-6th Company, a Chinese state-owned construction company, to undertake infrastructure construction activities and four Chinese state farms to implement the large-scale farming activities. WAADL also made arrangements to partner with a local Mozambican counterpart, Regadio do Baixo Limpopo (RBL), a public company in charge of local irrigation schemes and land use that had previously worked with the Friendship Farm. In a contract between the two parties, RBL was charged with contracting 20,000 ha of farmland in Xai-Xai to Wanbao, organizing local farmers for training, and supporting implementation of the project. Construction began in July 2011. The precise date of project completion is unknown, but this farm is now considered to be one of the largest rice farms in Africa. Then, in 2017, the China Railway 20 Bureau Group Corporation signed a cooperation agreement with the CAD Fund and began to manage Wanbao rice farm. During the planting season for 2018-2019, Wanbao rice farm grew 2,400 hectares of rice in cooperation with 500 households of farmers. Its rice output was increased from 1.5 tons per hectare to 7 tons per hectare., hitting historical records in the planting area.

Additional details

1. This project is also known as the Hubei-Gaza RIce Project and Wanbao Xai-Xai Project. The Portuguese project title is Fazenda de Amizade Hubei-Gaza. The Chinese project title is 万宝莫桑比克农业园项目 or 莫桑比克湖北—加扎友谊农场土地的开发、种植项目 or 襄阳市万宝粮油有限公司在莫桑比克农业开发项目 or 万宝非洲农业发展有限公司带动莫桑比克农业开发.

Number of official sources

5

Number of total sources

15