CDB provides loan to China-Africa Cotton Malawi Limited for Cotton Planting and Purchasing Project (Linked to Record ID#65901)

Project narrative

In 2016, China Development Bank (CDB) provided a loan to China-Africa Cotton Malawi Limited — a wholly-owed subsidiary and special purpose vehicle (SPV) of China-Africa Cotton Development Limited — for the Cotton Planting and Purchasing Project in Malawi. This project, which is also known as Balaka cotton plantation and processing project, reportedly cost $30 million. However, the face value of the CDB loan is unclear. This project is located in Balaka, Malawi. It is predicted to benefit over 50,000 cotton-farming households as the processed cotton is an in-demand agricultural commodity, can be used for making garments, and cooking oil can be extracted from cotton seeds. The implementation contract was signed as of August 2016. The project created approximately 1,000 jobs for local workers in the processing plant. In Malawi, the company set up a gin mill and oil mill. Since 2011, China Development Bank has provided cotton acquisition loans to China-Africa Cotton for purposes of importing Malawi-grown cotton. Malawi produces on average 158,000 metric tons of cotton annually and exports about 32% of the total production. According to the CDB in 2018, since 2011, CDB has provided 9 cotton purchase loans to China Africa Cotton Development Co., Ltd. for a total of $125 million, which is mainly used to import cotton lint from Malawi, Mozambique, Zambia, and Zimbabwe, Mali, and Mauritius as part of a The Cotton Planting and Purchasing Project, the largest agriculture investment project in Africa (captured in #65901).