Mozambique: Poverty Reduction-US$ 25 Million ADF Loan for Dam and Agricultural Rehabilitation

Abidjan, Ivory Coast – The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank (AfDB) Group on Friday 2007-03-02 in Tunis, approved a supplementary loan of 17 million Units of Account (UC*), equivalent to US$ 25.58 million to finance the Massingir Dam and Smallholder Agricultural Rehabilitation Project in Mozambique.

The objective of the rehabilitation project is to improve the operational efficiency of Massingir Dam to a sustainable level in order to facilitate the capacity of smallholders’ down-stream irrigation to produce major crops in order to improve the living standard of the beneficiaries. It will also involve rehabilitating and reconstructing the Xai-Xai Irrigation Scheme, north of Maputo (pump stations, drainage collectors and irrigation canals) to enable the project to contribute to GDP growth and poverty reduction in the country.

In addition to initial project components, the rehabilitation will include the construction of an additional Auxiliary Spillway at Massingir Dam to ensure its safety, and rehabilitation of gates and installation of pumps at Chilaulene (on the Augluzane River, a tributary of the Limpopo River, downstream from Xai Xai). This will help prevent salt intrusion from high tides as well as protect the irrigation infrastructure from the type of floods that occurred in this area in 2000.

The project has the following components:

• Protection of the dam and reinforcement of its foundation through construction of an auxiliary spillway, additional grouting and relief wells;
• Completion of the construction/rehabilitation of irrigation and drainage canals, pump stations and salt intrusion gates/pumps;
• Completion of land rehabilitation, provision of support services to farmers;
• Completion of road construction within the irrigation scheme;
• Continuation of the implementation of environmental and social mitigation measures;
• Continuation of the provision of support to PIU (Project Implementation Units).

An ADF loan of UA55 million was approved in 1993 for the rehabilitation and completion of the Massingir Dam and rehabilitation of an irrigation scheme downstream from the dam at Xai Xai. Supplementary activities estimated to cost UA 18.88 million are expected to complete the project. The ADF loan will finance 90% of total project costs, while the contribution of the Mozambican government will cater for the remaining 10% or UA 1.89 million.

The AfDB Group operations in Mozambique started in 1977. To date, its commitments in the country stand at US$ 1.4 billion for 95 operations.

* 1 UA = USD 1.50472 = MZM 39, 0693 as at 02/03/2007