The World Bank Group’s International Finance Cooperation (IFC) and the UK’s development finance institution, CDC Group have come together in a venture to improve logistics infrastructure in Kenya, in a region where the lack of quality, international-standard warehousing space hinders business growth and economic development.
They have announced a joint investment of $35 million, $10 million from the IFC and CDC’s $25 million in Africa Logistics Properties Holding (ALP), a developer and manager of modern, grade-A warehousing.
Quality warehousing reduces waste associated with poor storage; increases the speed of product delivery; and improves product security.
The cost of moving goods in Africa is an estimated two to three times higher than in developed countries with transport costs counting for as much as 50 to 75 per cent of the retail price of goods.
“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,” said Mary-Jean Moyo, Regional Head of Manufacturing, Agribusiness and Services, IFC sub-Saharan Africa.
This investment will support the growth of Africa’s trade within and beyond the continent.
According to ALP’s Toby Selman, the funding will not only be a capital injection in ALP but will also help the company deliver modern logistics parks with world-class environmental and social risk management standards.
Maris, a Nairobi-based private investment business focused on sub-Saharan Africa which backs ALP will invest $8 million.
IFC and CDC are joined in the project by among others Mbuyu Capital Partners, an Africa-focused, UK-based asset manager with a $5 million investment.