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The International Finance Corporation (IFC), an arm of the Washington-headquartered World Bank, has joined hands with the UK-based development finance institution CDC Group to help Kenya develop its infrastructure for the crucial logistics sector.
Due to absence of superior, global-standard warehousing space, the business expansion and economic growth in the region has been sluggish.
The IFC and the CDC Group have announced their plans to make $35 million in investment jointly, comprising IFCs input of $10 million and CDCs contribution of $25 million, in Africa Logistics Properties Holding (ALP).
ALP develops as well as operates futuristic, grade-A warehousing.
With quality warehousing facility, waste linked to inadequate storage can be minimized, while it can ensure fast delivery of products; and better security for products.
Africa has to spend two to three times more for transportations over the developed regions and thus the cost of moving goods in the continent is extremely high, which account for up to 50% to 75% of the retail price of goods.
The Regional Head of Manufacturing, Agribusiness and Services at IFC sub-Saharan Africa Mary-Jean Moyo stated, 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.
The African region, with this investment, will be able to expand its trade and business activities in the continent and beyond that.
Speaking for ALP, Toby Selman has revealed that the funding, apart from just a capital infusion into the company, will also facilitate ALP to provide contemporary logistics parks with top-notch standards for environmental and social risk management.
The ALP-backer Maris, a Nairobi, Kenya-based private investment business focused on sub-Saharan Africa, has made commitment for $8 million.
The IFC-CDC backed project has been joined by several entities including the UK-based asset manager Mbuyu Capital Partners.
Mbuyu Capital Partners, focused on the African market, has an investment portfolio of $5 million.