IFC invests $45 million to boost production of locally made, sustainably manufactured glass by Kioo Tanzania
IFC is supporting the expansion of Tanzanian glass manufacturer Kioo to meet increasing domestic and regional demand for glass bottles and containers, the two entities have announced. The project will create thousands of jobs and contribute to economic growth in Tanzania.
Under the partnership, IFC will provide a loan of up to $45 million to help Kioo grow its manufacturing capacity and reduce its environmental impact. With IFC's support, Kioo will increase the amount of recycled glass that it uses in its production process, helping to reduce energy consumption.
The project will help Kioo meet growing demand in its regional markets and generate thousands of jobs directly and indirectly along its supply chain. The beverage sector in East Africa, Kioo's primary market for refillable glass containers, is projected to grow up to 10 percent per year over the next five years. However, a supply gap in the region means that about 40 percent of the demand is met by imports. Tanzania is one of the few countries in East Africa with longstanding glassmaking and export capabilities.
By substituting imported glass with locally manufactured, cost-efficient products, the project will foster the growth of the region's beverage industry.
"The relationship with IFC has been outstanding over the years and has helped Kioo grow. Kioo is already the largest glass manufacturer in the region and has become a supplier of choice to many of its customers. The new expansion will further boost the beverage industry's growth across East and Central Africa. This investment is a testament to the group's continued belief in Africa and a sustainable future," said Kioo Director, Kumar Krishnan.
"There is a clear opportunity in East Africa to create jobs by closing the supply gap in the manufacturing sector," said Henrik Elschner Pedersen, Regional Industry Director for manufacturing in Africa at IFC. "Our investment in Kioo will not only directly support this through the company's increased capacity but will also help strengthen the glass value chain across the region."
This is the third time that IFC has supported Kioo, with previous loans helping the company expand, as well as maintain and upgrade its equipment. As of the end of FY23, IFC had a $442.1 million investment portfolio and an advisory portfolio of $11.9 million in Tanzania. In FY23 alone, IFC new investments totaled $115 million.
