IFC and CDC invest $35 million to support Kenya’s economy through modern warehousing development
International Finance Corporation, and CDC Group, the UK’s development finance institution, will invest up to $35 million in Africa Logistics Properties Holding (ALP), a developer and manager of modern, grade-A warehousing, filling an important gap in logistics infrastructure in the region.
The investment—$10 million from IFC and $25 million from CDC—will be used for ALP’s developments in Nairobi, Kenya, the trading hub of East Africa, where the lack of quality, international-standard warehousing space has long been a constraint on business growth and economic development.
Quality warehousing improves operational efficiencies by reducing waste from poor storage, increasing the speed of product delivery and improving product security.
The cost of moving goods in Africa is estimated to be on average two to three times higher than in developed countries and transport costs can count for as much as 50-75% of the retail price of goods. By investing in ALP, both IFC and CDC are supporting Africa’s growing trade, both within the continent and overseas.
ALP is backed by Maris, a Nairobi-based private investment business focused on sub-Saharan Africa, which will invest $8 million. IFC and CDC are also joined in the project by Mbuyu Capital Partners, an Africa-focused, UK-based asset manager with an investment of up to $5 million, among others. ALP will be led by founder Toby Selman, an experienced emerging markets warehousing developer, and a Nairobi-based team with African and international experience.
“IFC and CDC not only bring capital and expertise as experienced investors in African infrastructure, but are also both committed to helping ALP deliver modern logistics parks with world-class environmental and social risk management standards,” said Toby Selman of ALP. ALP warehouses will adhere to IFC Edge green buildings standards.
Mary-Jean Moyo, IFC Regional Head of Manufacturing, Agribusiness and Services in sub-Saharan Africa, said, “Introduction of modern warehousing in Kenya will support growth, employment and trade across a range of industries. With access to quality logistics, global companies will find it easier to ramp up businesses in Africa.”
Ilaria Benucci, CDC’s Investment Director, said, “CDC is backing ALP because we know that logistics is a critical, yet often overlooked, part of economic development. Investment in agriculture is futile if there is no supply chain in place to get produce to market.
Essential medication won’t work if it cannot be transported and stored in the right conditions. Our investment will support a company that’s making trade easier in Kenya and we hope that it can be the start of an expansion into other African cities.”
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity.
CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development and job creation. CDC provides capital in all its forms, including equity, debt, mezzanine and guarantees. It has net assets of £3.9 billion.
