IFC portfolio investments in Kenya hit Sh39 billion mark

By MACHARIA KAMAU

The International Finance Corporation (IFC) almost tripled its investments in Kenya during the 2012/2013 financial year. IFC’s Investments in Kenya also accounted for more than 80 per cent of the institution’s investments in East Africa during the year.

IFC, which is the investment arm of the World Bank, pumped $456 million (Sh39b) in both debt and equity to various private sector companies in the country, a significant rise from $158 million invested in Kenyan firms in the 2011/2012 financial year.

Investments in Kenya are against $568 million (Sh49.42b) that IFC invested in East Africa last year, leaving its East African neighbours to share $112 million (Sh9.74b). IFC invests in companies globally either by advancing loans or buying them out.

The institution noted that it would be investing more in the country and the region but has found limited projects to invest in either by way of debt or equity.

IFC director for Eastern and Southern Africa, Oumar Seydi also said the money advanced to Kenyan firms was mostly aimed at growing their regional presence.

“Regional integration was a cross cutting theme in our investments and the companies that we financed are mostly looking at expanding to the region or financing their operations in the region,” he said.

The investments, he added, are determined by the activities of the private sector though the institution is constrained by the number of opportunities it finds.

Money invested

A substantial amount of the money invested in Kenya went to the energy, financial services and agricultural sectors.

IFC loaned $50 million to Kenya Power to help the national power distributor to expand its network and reach over half a million new households by 2014. IFC and Belgian company Electrawinds will jointly develop the 90-megawatt Mpeketoni Wind farm in Lamu County.

It also advanced a $20.7 million loan to Gulf Power – an independent power producer – to put up a 90MW thermal power plant in Thika. IFC also made a $4 million equity investment in AAR Health Care, which is expected to enable the health services providers expand its footprint in Kenya as well as the region, including opening hospitals in other cities in East African countries.

Kenya Tea Development Agency (KTDA) was given a loan of $12 million to put up a 200 000 square foot warehouse in Mombasa. The warehouse is expected to increase KTDA’s capacity to store and export tea from its factories across the country.

Other Kenyan firms that benefited from IFC’s investments include Gulf African Bank, which received $5 million for onward lending to small and medium businesses, mortgage lender Housing Finance that received a $20 million loan and Kenya Commercial Bank (KCB) that received $108 million in trade finance.

“By focusing on developing Africa’s private sector in key areas such as power generation, transport or agribusiness, we are playing an active role in stimulating sustainable economic growth and job creation in the region,” said Seydi.