To
Portfolio Committee on Agriculture, Land Reform and Rural Development
From
Jabu Madlala
Subject
LAND BANK AND BLENDED FINANCE
Date
25 August 2019 3:42 p.m.
Dear Portfolio Committee on Agriculture, Land Reform, and Rural Development,

I have been reading and following every detail of your most recent meetings and discussions especially around the Blended Financing.

Whilst this financing structure is the best for previously disadvantaged who still cannot be approved for financing by the IDC, NEF nor the land bank if borrowers were to make the applications using traditional financing.

The blended financing structure allows the local financial institutions to be the co-investor where the primary investor is a foreign financial institution or private equity firm. Local institutions can then support the Agriculture project owners to relax the guarantees that may be required.

I have spoken to the Land Bank who has informed me that the BLENDED FINANCING is currently suspended. Nobody could say until when.

The timing of the suspension of the BLENDED FINANCING STRUCTURE is happening at the wrong time when there are several foreign investors that are interested in financing various agriculture projects (across the ecosystem) especially projects that are owned by Black Africans.

Recently the government announced the availability and commencement of the black industrialist f program which will require most project owners to bring in foreign direct investors under the blended financing structure in order for them to qualify for the incentives.

Without Blended financing or similar financing structure, many project owners or developers will suffer severely.

Please confirm if the information from the Land Bank is true and when we can expect the blended financing to be offered once more.

I look forward to hearing from yourselves in this regard.

Regards,