E2 BILLION FOR AGRICULTURAL TRANSFORMATION WITH SWADE

MBABANE – All is in order for rollout of the second phase of the of the Lower.
Usuthu Smallholder Project (LUSIP II) valued at the E2.01 billion.

The total project cost, including physical and price contingencies, was estimated at E2.01 billion net of taxes and duties.
In the project appraisal report, the price contingencies were based on projected local and foreign inflation rates of five per cent and two per cent per annum, respectively.

It was reported that the physical contingencies ranged from zero per cent (consultants’ salaries) to 10 per cent (works), based on common technical practices.

 It has been mentioned that this will be financed by African Development Bank  (AfDB) loan of E855.13 million covering the cost of the Main Canal System (Component 1); European Investment Bank loan of E498.958 million (Component two); BADEA and Kuwait Fund Loans of E437.56 million (Component three); and government counterpart contribution of E216.33 million. It has been reported that the government’s contribution will finance the cost of the Project Management Component to the tune of E194.99 million, and a fund shortfall of E21.34 million under component three. “All the donors have committed to parallel financing of the project,” reads the report in part.
It was explained that the objective of the project was to alleviate poverty in the project area, by transforming the existing subsistence farmers into commercial farmers on irrigated lands producing both food and cash crops (principally sugar cane).

It is to support the development and utilisation of the water resources of the Lower Usuthu River through provision of irrigation infrastructure, to enable smallholder farmers to intensify and diversify their agricultural production building on existing market linkages with the private sector. It is also aimed at establishing an effective management of infrastructure and equipment for the sustainable improvement of production and cost recovery.

The LUSIP Phase II has four main components, namely: development of the Main Conveyance System (MCS); development of Secondary Irrigation Pipe Network supplying the different irrigation blocks, each covering 100-700 ha; on Farm Infrastructure Development; and project Management and Engineering Supervision.

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