Agrico and Absa launch finance option for centre pivot irrigation systems

(photo credit: AGRICO)

According to an article published in Farmer's Weekly, the agreement allows qualifying clients to finance complete Agrico centre pivot irrigation systems at preferential interest rates of as low as prime minus 2%. The finance can cover more than the pivot itself, including pipelines, pumps, sprinklers, automation and other components required to deliver water to the crop.

Repayments can follow farm cash flow

One of the main features of the arrangement is flexibility around repayment. Farmers can structure payments monthly or annually to better match their income cycle, while VAT can be settled after three to four months. That is significant for producers because irrigation investments are capital-intensive and often need to be funded well before additional production income is realised.

Focus on water and energy efficiency

Agrico says the partnership is intended to make it easier for farmers to invest in systems that use water and energy more efficiently. Managing director Walter Andrag said the company’s aim is to support producers with irrigation systems designed for local farming conditions and to help improve yields and long-term sustainability. Agrico currently operates 42 branches across Southern Africa, providing irrigation equipment, technical support and after-sales service.

Finance linked to agricultural infrastructure

Absa AgriBusiness brings the financing component to the partnership. Loffie Brandt, sector executive for agriculture at Absa AgriBusiness, said irrigation investment remains important to food security and farm resilience, particularly where producers need to improve the reliability and efficiency of water use. The partnership combines Agrico’s irrigation expertise with Absa’s agricultural lending experience.

Why this matters for South African producers

For many farmers, the challenge with irrigation upgrades is not whether the technology is useful, but whether the upfront cost can be absorbed without placing too much pressure on cash flow. By financing the full system rather than only the visible centre pivot, the arrangement could make it easier for growers to invest in complete irrigation infrastructure rather than upgrading components piecemeal. That can be important where pumps, pipelines, sprinklers and automation all need to work together efficiently.

With water availability, electricity costs and production margins under pressure, access to appropriately structured finance can influence whether producers are able to modernise irrigation when they need to. For qualifying farmers, the value of the partnership therefore lies in linking infrastructure finance more closely to the realities of agricultural cash flow and long-term farm investment.