MIGA's Cotton Project in Afghanistan to assist growers
09 Mar '06
3 min read
World Bank Group member The Multilateral Investment Guarantee Agency (MIGA) said it has provided $1.07 million in investment insurance (guarantees) for a cotton project in northern Afghanistan. The guarantees will protect the investment against the non-commercial risks of currency transfer restriction, expropriation, and war and civil disturbance, including terrorism.
The project, the first investment in Afghanistan to be guaranteed by MIGA, will provide technical and financial assistance to cotton growers in northern Afghanistan to increase cotton production and yield, as well as upgrade the region's capacity for ginning cotton and producing cottonseed oil.
The New Afghanistan Project for Cotton and Oil Development (NAPCOD) is a joint venture between DAGRIS, S.A., which is majority-owned by the French government, and the government of Afghanistan.
The Agence Française de Développement is also supporting the investment. NAPCOD will produce, collect, and gin cotton, as well as refine the cotton seeds to produce animal feed and high-value oil. In its first season, NAPCOD has already purchased cotton from more than 4,600 farmers and aims to increase that number to 20,000 by 2008.
The project is expected to create around 300 permanent jobs, in addition to stimulating local businesses that supply goods to the cotton industry. All of NAPCOD's cotton production is destined for export, which should help improve the country's balance of payments.
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