DEG: EUR 25m for food production in Paraguay

DEG | Thursday, 31. January 2013

DEG: EUR 25m for food production in Paraguay

• Paraguay Agricultural Corporation expands its activities
• High level of environmental and social commitment

More locally produced food and sustainable forestry: these are the goals at the centre of a project which DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, is financing in Paraguay. DEG is investing EUR 25m in the Paraguay Agricultural Corporation (PAC), a subsidiary of the holding company Rio Forte Investments S.A., which is seeking to expand its commitment in the Paraguayan agricultural sector.

On a surface area of 135,000 hectares, PAC cultivates soya, wheat, maize and cotton, in addition to livestock breeding and focusing on sustainable, FSC-certified forest management. The company was the first to be certified by the Forest Stewardship Council in Paraguay in 2003. DEG's investment will be used to acquire 5,000 hectares of agricultural land, expanding irrigation systems, cultivating rice for the first time and producing timber sustainably. The overall investment volume is EUR 37m. Rio Forte on the road to expansion in Paraguay's agricultural sector: The planned rice cultivation alone should account for ten per cent of the country's overall rice production.

"Our commitment is strengthening a professional company which is very clear on its responsibilities, and which will be able to expand and diversify its product range through the additional funds," stated Bruno Wenn, Chairman of DEG's Management Board, on the occasion of the signing ceremony in Cologne.

Rio Forte, the Investment Company of the Portuguese Espirito Santo Group focused on non-financial investments, is a very socially committed company. For instance, the subsidiary, PAC, in Paraguay provides schooling for the children of employees and in this way benefits local communities in the area of education. Additionally, there is assistance for the conservation of the Ypeti nature reserve, totalling 12,000 hectares and for local smallholders, who, alongside funding, are also recipients of know-how on sales and technology.

DEG not only provides financial solutions. It also supports Rio Forte with advisory services on how to further improve its internationally recognised, ecologically and socially responsible farming management practices. The company cooperates with the WWF on a strategy for forest rehabilitation, sustainable forest management and improving the economic situation of neighbouring communities.

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Source: DEG

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