IFC Supports Rural Employment in Ethiopia with Investment in Afriflora
IFC will lend up to €90 million to support Afriflora Group, a leading large-scale rose grower and distributor based in Ethiopia that employs more than 9,000 workers, more than 80 percent of them women. The funding will support Afriflora’s plan to expand production by 60 percent, install water recycling systems, and increase employment by more than 50 percent. Afriflora is founded and run by the Barnhoorn family.
Agriculture provides almost half of Ethiopia’s economic output and employs 85 percent of its population, according to the World Bank. The floriculture industry plays a major part in economic growth and poverty reduction. Afriflora cultivates, produces, and sells sustainably-grown roses and has built a strong reputation for its fair-trade approach and contributions to the local Ethiopian community where it operates.
Peter Barnhoorn of Afriflora said, “Afriflora is a leading employer in Ethiopia and we are committed to expanding production in a way that adheres to global standards for environmental and social sustainability. Our new partnership with IFC will allow Afriflora to transition to the next phase of our growth strategy.”
The Afriflora Group’s main growing facility is located in Ziway, Ethiopia; where the company directly supports about 30,000-40,000 people and more than 100,000 people receive indirect benefits. IFC will work closely with Afriflora to improve labor and working conditions, helping raise living standards for the company’s employees and their families. Afriflora also engages in a wide array of community development activities, including operating schools from elementary to high school, a hospital and a football stadium.
German Vegarra, IFC Head of Manufacturing, Agribusiness, and Services in Africa said, “The horticulture industry holds great potential for creating jobs, generating economic growth, and reducing poverty. Ethiopia’s climate, land and water resources can make it a strong competitor in the European market for cut flowers, and this investment will help develop the logistics, cold storage and transport required to fulfill this potential. With IFC”s support, Afriflora will strengthen its labor conditions, ensuring a safe, healthy and productive environment for its workforce in Ethiopia.”
Afriflora’s strong reputation and growth have attracted the interest of global financiers. In June 2014, leading global investment firm KKR became the largest stakeholder in Afriflora with an equity investment designed to enhance and support the long-term growth of the company. IFC’s loan complements KKR’s commitment, supporting Afriflora’s capacity expansion plans.
“Afriflora is a great example of a company that is doing well whilst being a responsible and meaningful contributor to the local community,” said Kayode Akinola, a Director at KKR and the head of KKR’s efforts in Africa. “The partnership with the IFC and their support with Afriflora’s expansion will go a long way to further amplifying the company’s commitment to sustainable development and its positive, local impact.”
Promoting agribusiness is a priority for IFC in Africa, due to agriculture’s potential to create jobs, secure food supply and catalyze economic growth. In its fiscal year ending June 2014, IFC invested $686 million in agribusiness projects across Sub-Saharan Africa.