Malawi - Second Phase of the Shire Valley Transformation Program Project : Additional Financing

Overview & Synopsis

The development objective of the Shire Valley Transformation Program - Phase 2 for Malawi is to develop irrigated commercial agriculture and strengthen the management of natural resources in the program area. The additional financing is required to close a financing gap caused by cost overruns from external shocks including Tropical Storm Ana’s damage to the Kapichira intake, design revisions to meet enhanced climate and safety standards, price escalation on large civil works, and inherited commitments from Phase 1, and to secure resources for environmental and social compliance so the project can achieve its development objectives within the current period. The Bank will work to complete and commission the temporary intake and the first 52 kilometers of Main Canals 1 and 2 with associated hydraulic and safety structures, restore borrow pits and other construction-affected sites, and transition the scheme from construction to operation through service provision and agreed safeguards actions. It will support land tenure registration and consolidation to establish the first cohort of Smallholder Owned Commercial Farm Enterprises (SOCFEs), strengthen land administration, dispute resolution, and stakeholder engagement, and finalize functional district land registries. It will operationalize the first commercial farm blocks through irrigation service delivery, agricultural advisory support, farm management services, governance strengthening, and capacity building to enable climate-resilient and commercially viable production. It will focus landscape and natural resources management on restoration and productive forestry in and around the immediate program area, alongside conservation-linked livelihood support and community coexistence measures. The project intends to deliver gravity-fed irrigation water to the first farm blocks, bring about 1,000 hectares of customary estates under irrigated commercial crops, advance climate resilience through upgraded canal designs and safety features, strengthen grievance redress and community health and safety programs, and improve management effectiveness of conservation areas, thereby catalyzing food security, employment, and private sector confidence in Malawi’s poorest region.