Amsterdam, October 13, 2016 - Kardan N.V. (‘Kardan’ or ‘the Company’), active in Real Estate and Infrastructure in emerging markets announces that Tahal Group B.V. (‘Tahal’), the Company’s (indirectly) wholly owned subsidiary, signed, together with its 50% partner, an agreement regarding the operation and management of a large scale agricultural project in the Quiminha area in Angola (the ‘Agreement’ and the ‘Project’, respectively).

Tahal and its partner, ZRB Consulting Finance & Development Limited (‘ZRB’), signed the Agreement with Gesterra – Gestao de Terras Araveis S.A., a company owned by the government of Angola.

The Quiminha Project is a communal agricultural project, located 70km east of the capital Luanda over an area of 5,000 ha. In an earlier phase, Tahal was assigned by the government of Angola to provide a full range of services to make the land suitable for agricultural use and to build the infrastructure for full communal and commercial services for the farmers and inhabitants. After successfully handing-over this project in mid-2016, Tahal has now been assigned with its partner for the operation and management of the site.

According to the Agreement, Tahal and ZRB will operate and manage this agricultural project of 5,000 ha which includes 300 private farms of 10 acres each, thousands of acres of crops, grains, vegetables and fruits in open areas and in green houses and chicken coops. The Project furthermore comprises water infrastructure and water treatment, irrigation, and various facilities in relation to crops, live-stock and the distribution of products. The extent of crops expected in the Project will reach approximately 60,000 tons of agricultural products per year to be sold in the domestic market.

Tahal and ZRB will be entitled, in equal shares, to the entire proceeds arising from the sale of the agricultural products, estimated at an average of $ 52 million annually for the duration of the Agreement. Under the Agreement, Tahal and ZRB undertook the responsibility to supply all equipment necessary for the operation of the Project, employing managerial and professional teams to operate the Project, and to pay a franchise fee to the government of Angola which has rights in the Project. The parties intend to commence the Project immediately and first revenues will be recognized in the fourth quarter of 2016.

The Agreement is for a period of 7 years, with an extension option for an additional 5 years. Accordingly, the gross proceeds to Tahal and ZRB during the initial period is estimated at $ 370 million.

In parallel, the parties have signed a memorandum of understanding with an International Fund with respect to financing the majority of the required equity for the Project, which will be non-recourse to the parties. Signing a binding agreement is expected in the coming period.

The expected revenues from the Project of $ 370 million is in addition to the current backlog of Tahal Group of more than $ 300 million. All the projects included in the backlog are for immediate execution, and do not require financing, financial closing and/or regulatory approvals.

“This Project is an important milestone for Tahal and reflects its true potential. It will increase Tahal’s backlog and will allow Tahal to continue improving its profitability.” said Ariel Hasson, CEO of Kardan.