Zambia Agribusiness and Trade Project-II (ZATP-II)

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The project aims to support Zambia’s aspirations on diversification and regional integration as well as private sector-led growth. The project centers on inclusion and impact at scale by targeting growth for the bottom 40 percent of earners, most of whom are employed in Zambia’s agricultural sector in micro and small businesses. While doing so, the project will also improve resiliency of Zambia’s agribusiness sector and render it more competitive, with an impetus on i) capitalizing on opportunities presented by the AfCFTA; ii) improving access to credit, thus amplifying the impact of public funding; iii) strengthening the business environment to ensure sustainability of project interventions; and iv) mainstreaming the role of the private sector especially women and rural youth as Zambia transitions to an inclusive and greener economy. The project is proposed to be an Investment Project Financing under the SUW/SML window with a credit amount of USD 70.00 million, with interventions that are mutually reinforcing across three project components: 1) Support access to markets and finance; 2) Promote Trade and Agribusiness Competitiveness by Strengthening Regulatory & Institutional Frameworks; and 3) Project Management.Component 1: Support access to markets and finance (USD 102.00 million) This component addresses key constraints related to limited access to finance, inadequate integration along value chains, lack of market linkages and weak business capabilities. This will be achieved through an integrated approach, including technical assistance or business development services and structured financing through a Line of Credit and Matching Grant facility. This component has the following three subcomponents.Subcomponent 1.a. MarketConnect (USD 20.00 million) : The objective of this subcomponent is to provide tailored technical assistance to Producer Organizations (POs) and agribusiness firms to ‘upgrade’ and improve market linkages as well as foster partnerships with off takers and buyers. Subcomponent 1.b. Productive Alliances (USD 52.00 million): The objective of this subcomponent is to support transition of small and marginal farmers to market-centric approaches by improving their capacity to finance and execute productivity enhancing investments. Subcomponent 1.c. Line of Credit (LoC) to support Agribusinesses (USD 30.00 million): This subcomponent will enhance access to finance by galvanizing financial intermediaries to work with growth-oriented agribusiness firms and enterprises. Overall—through a combination of business development services, matching grants to jumpstart productive alliances, and provision of a credit facility—Component 1 will address demand-side constraints of farmers and high-growth agribusinesses in Zambia. This component is aligned with Pillar 1 and Pillar 2 of GCRF. Component 2: Promote Trade and Agribusiness Competitiveness (USD 54.00 million)The objective of this component is to enable the key stakeholders in Zambia’s agribusiness sector and those benefitting from component 1 to take advantage of improved business environment and opportunities emerging from AfCFTA. This component will seek to improve trade pathways, quality infrastructure, and business enabling environment i.e., meso-level sectoral activities that are critical for firms and farmers and in line with the AfCFTA. Special focus would be placed on SMEs and women traders to ensure that the project addresses the key constraints faced by them. Component 2 is aligned to Pillars 1 (Responding to Food Insecurity) and Pillar 2 (Protecting People and preserving Jobs) of GCRF and will comprise of the following activities:• Implementing trade commitments. • Improving trade efficiency• Strengthen Business regulatory, NQI and SPS capacities and facilitiesComponent 3: Project Management (USD 14.00 million)This component will ensure effective implementation of project activities, including monitoring and evaluation of project implementation progress. It will primarily build on the implementation experience of Zambia Agribusiness and Trade Project (ZATP), that was started in 2017 and slated to run through 2024. This Component will support i) project operations; (ii) implementation of the stakeholder engagement plan and feedback mechanism to inform project implementation; (iii) implementation of the project’s grievance redress mechanism; and iv) an M&E system to account for the national project scale-up and additional sub-components being introduced on top of existing ZATP interventions. An indicative list of financed activities under this component includes dedicated staffing of the project at the provincial level, accompanying costs to ensure fiduciary compliance and adherence to safeguards, consultancies, training and related material, project communications, office equipment (including project ICT systems), and incremental operational costs