Agro EcoEnergy has entered into a unique agreement with the government of Tanzania. In exchange for land “free of encumbrance”, the government and local communities will receive 10% non dilutable equity ownership on the 550 MUSD project company at financial closure, and a further 15% after 18 years of operations. Government and local communities thereby take part in the long term value creation through commercial farming and local industrial processing. In 2008, the Razaba land was demarcated as the bulk area for the project as well as some adjacent land of Fukayosi was agreed through the village assembly of Fukayosi to become Project land. It was formally declared as a project land according to international standards in November 2011. The land title with a 99 year lease was formally issued in May 2013. This unique “Land for Equity” agreement is, according to the Government of Tanzania, intended to serve as a role model for a new national “Land for Equity” policy aimed at large scale land investments.
Land productivity is a substantial factor in environmental development. Land is a strategic investment point where sustainable livelihoods can be generated through large private investments in agriculture and related processing industries. This is a means by which a community’s primary physical asset can be used and given value. The productivity of the land is enhanced using irrigation and modern agricultural practices through knowledge transfer and ready market access. The benefits come in the form of direct jobs and more importantly in the form of commercial farmers, increased skills and activity in the surrounding economy.