Development finance institution the International Finance Corporation (IFC) has said it will provide a $36-million local-currency-linked loan facility to Illovo Sugar Malawi to 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.

Once the water purchase agreement between Illovo Sugar Malawi and the Malawi government is signed, Illovo Sugar Malawi’s role as the anchor offtaker of the SVTP will be formalised, and enable the start of its irrigation infrastructure upgrades, the IFC says.

The partnership will reduce Illovo Sugar Malawi’s water and energy consumption and cost of production, while supporting and creating jobs for farmers and others along the agriculture supply chain.

The upgrades are expected to save an estimated 34-million cubic metres of water a year, and reduce energy use by 91% at the plant.

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

The IFC is part of the World Bank Group.

Further, the loan provides funding disbursed and repaid in dollars but denominated in Malawi kwacha, thereby allowing the company to align repayments with its primary currency of earnings.

“IFC’s partnership with Illovo Sugar Malawi reflects our shared strategy to support sustainable agriculture production and job creation in the country,” says IFC manufacturing, agribusiness and services in Africa regional industry director Henrik Elschner Pedersen.

“By providing local currency funding, the IFC is helping Illovo Sugar Malawi mitigate against currency fluctuations and maintain business stability, thereby supporting livelihoods for farmers, sustaining jobs and contributing to Malawi’s broader economic resilience,” he says.

Illovo Sugar Malawi employs more than 10 000 people directly and another 5 000 throughout 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 US.

Meanwhile, in Malawi, the IFC supports projects in agribusiness, energy, infrastructure and the financial sector, complemented by advisory programmes for both the private and public sectors.

In 2025, the IFC committed $37.4-million to Malawi and mobilised an additional $50.4-million in investments from private sector and regional partners.