The International Finance Cooperation (IFC) on Tuesday said it will give $3 million USD for the establishment of a major raisin processing factory in Kabul’s Istalif district.
The IFC said in a press release the Multilateral Investment Guarantee Agency (MIGA) will also provide $7.8 million USD in political risk insurance coverage for the company to develop the country’s raisin market.
The new financial support is aimed to help Afghanistan’s agriculture sector regain its international standing in raisin production, read the statement.
“Afghanistan was once famous around the world for its raisins and we hope this project will put the country back on the global map for raisin production,” said Mase Rikweda, CEO of Rikweda Fruit Processing Company. “The new plant will also help thousands of small local farmers, especially women and those in rural areas, to access the market.”
IFC said Afghanistan’s climate is very good for growing grapes, which are then dried to get raisins. However, less than 40 percent of the country’s annual raisin productions is exported. According to the IFC, one of the reasons behind the low export volume of raisins is instability, poor quality and the lack offood safety standards.
The IFC said they hope with this new facility, these problems will be overcome.
The IFC regional director for the Middle East and north Africa said the agriculture sector plays a crucial role in the lives of Afghan people and that they hope the new raisin factory will help more farmers, including women, to participate in the value chain.
“Nearly 90 percent of Afghanistan’s poor live in rural areas where agriculture plays a major role in their lives,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and north Africa. “Raisin processing can create entry points for farmers, including women, to participate in the value chain and improve the livelihoods of thousands of poor families.”
This is the first joint project by IFC and MIGA in Afghanistan and it is the first time that IFC has been investing in Afghanistan’s agribusiness sector.
“Given the highly volatile and risky environment, we are expanding our efforts to mitigate the risks and enable sustained engagement in various sectors of Afghanistan, including agriculture, which is a major source of jobs in the country,” said Sarvesh Suri, Director for the MIGA Operations Group.
The project is also aimed at providing job opportunities for 3,000 farmers and workers.
Afghanistan’s Ministry of Agriculture, Irrigation and Livestock (MAIL) meanwhile said the new raisin processing plant will increase production and exports.
The ministry’s spokesman Akbar Rustami said 350 raisin storage houses will be built in the country this year.
Rustami said Afghanistan produces more than one million tons of raisins every year.
“Besides building hundreds of raisin storage facilities the ministry of agriculture provides financial and technical support to the private sector in this respect,” said Rustami.
An economic affairs analyst said Afghanistan has good opportunities for investment in raisin processing.
“Such projects will create the agriculture value chain and it will not only support farmers but other sectors too,” economic affairs analyst Abdul Wasi Haidari said.
According to the Ministry of Agriculture, Afghanistan produces 1.1 million tons of grapes every year which provides a good opportunity for raisin production.