IFC Partners with Illovo Sugar Malawi to Drive Sustainable Agriculture and Job Creation

Lilongwe, Malawi, November 7, 2025 - IFC has announced a partnership with Illovo Sugar Malawi that will reduce the company's water and energy consumption and cost of production, while supporting and creating thousands of jobs for farmers and others along the agriculture supply chain.

Under the partnership, IFC will provide an innovative, local-currency-linked loan facility to Illovo Sugar Malawi of $36 million. The loan, supported by Associated British Foods plc and the World Bank Group's International Development Association Private Sector Window Local Currency Facility, provides funding disbursed and repaid in U.S. dollars but denominated in Malawi kwacha, allowing the company to align repayments with its primary currency of earnings.

IFC's funding will finance upgrades to bulk water irrigation infrastructure at Illovo Sugar Malawi's Nchalo Sugar Estate. The project will connect the estate to the main canal being built under the World Bank's Shire Valley Transformation Program (SVTP), which supports agricultural growth through irrigation, land tenure, and resource management.

The funding exemplifies the World Bank Group's AgriConnect Initiative, aimed at transforming agriculture by improving infrastructure and mobilizing private capital to create jobs, raise incomes for millions of smallholder farmers, and improve food security.

Once the water purchase agreement between Illovo Sugar Malawi and the Government of Malawi is signed, Illovo Sugar Malawi's role as the anchor off-taker of the SVTP will be formalized. This will enable the commencement of the company's irrigation infrastructure upgrades.

The upgrades are expected to save an estimated 34 million cubic meters of water annually, equivalent to 13,000 Olympic-sized swimming pools-and reduce energy use by 91 percent at the plant, equivalent to almost 28,000 tons of carbon dioxide.

"The timing of IFC's partnership with Illovo Sugar Malawi plc is particularly opportune, given the prevailing foreign exchange scarcity in our economic environment. This collaboration is poised to enhance foreign exchange availability for the project," said Kondwani Msimuko, Finance Director of Illovo Sugar Malawi plc.
"This facility reflects innovation tailored to our local context and the specific needs of our project. IFC's role as a partner demonstrates a deep understanding of the private sector's challenges and a commitment to fostering sustainable agriculture growth."

"I am delighted that we are able to partner with the IFC on the financing for such an important project" said Alan Drew, Group Treasury Director of Associated British Foods plc. "By combining our different sectors, we are able to support significant development opportunities and drive positive change for local communities and economies".

"IFC's partnership with Illovo Sugar Malawi reflects our shared strategy to support sustainable agriculture production and job creation in the country," said Henrik Elschner Pedersen, IFC Regional Industry Director for Manufacturing, Agribusiness, and Services in Africa. "By providing local currency funding, IFC is helping Illovo Sugar Malawi mitigate against currency fluctuations and maintain business stability - supporting livelihoods for farmers, sustaining jobs, and contributing to Malawi's broader economic resilience."

Illovo Sugar Malawi employs more than 10,000 people directly and another 5,000 through its supply chain. From its two production sites, the company produces both raw and refined sugar, supplying the domestic market and exporting to other African countries, Europe, and the United States.

In Malawi, IFC supports projects in agribusiness, energy, infrastructure, and the financial sector complemented by advisory programs for both the private and public sectors. In fiscal year 2025, IFC committed $37.4 million to Malawi and mobilized an additional $50.4 million in investments from private sector and regional partners.