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Nairobi, Kenya, December 1, 2003
— The International Finance Corporation, the private sector affiliate of the World Bank, has signed an agreement to provide $26 million in loans—its largest investment in Kenya since 2000—to Magadi Soda Company Limited. IFC’s investment is part of a $55 million senior and subordinated loan package provided by IFC, the European Investment Bank (EIB) and the Netherlands Development Finance Company (FMO). FMO’s $13 million financial contribution consists of a subordinated loan and a guarantee.
The investment, IFC’s second in Magadi Soda, will help finance the construction and operation of a 365,000 ton per year high-purity soda ash plant and associated off-plot projects. The high-purity soda ash will be exported primarily to the container glass sectors in the emerging markets of Asia, Africa, and the Middle East. Magadi Soda, a subsidiary of Brunner Mond Group Ltd. (UK), is Africa’s largest natural soda ash producer, currently exporting about 330,000 tons annually of lower-grade soda ash to these markets. It is also Kenya’s second largest foreign currency earner and represents the only substantial economic activity in a remote part of Kenya, creating jobs for the local communities. The project will help sustain and strengthen the company's ability to provide free housing, schooling, hospital services, drinking water and rail transportation for the predominantly Maasai communities in the Magadi region. In addition, it will raise the environmental, health and safety standards of Magadi Soda’s operations.
At the signing ceremony, Mr. Peter Woicke, IFC Executive Vice President, said, “This project represents IFC’s continuing commitment to the development of the private sector in Kenya and its support for companies that are export-oriented and are good corporate citizens, setting high standards with their environmental, community development, and governance practices. We also congratulate Magadi Soda for receiving—for the second consecutive year—the Corporate Citizenship Award from the Kenya Institute of Management for its corporate social responsibility and sensitivity to the needs of the community in which it operates.” The ceremony was attended by Ms. Haydee Celaya, IFC’s Director for Sub-Saharan Africa; Mr. Peter Haslehurst, Brunner Mond Chairman; Mr. James Mathenge, Magadi Soda CEO; and other members of Magadi Soda's board and senior management. High-level Kenyan dignitaries and FMO representatives were also present.
Remarking on the excellent cooperation between all partners in the project, Ms. Celaya noted, “The joint efforts of IFC, EIB, and FMO over the past year have contributed significantly to the implementation of this high-impact project. We expect this cooperation to result in more jointly financed projects in Sub-Saharan Africa, which has limited access to commercial funds.”
Mr. Rashad Kaldany, IFC Director for Oil, Gas, Mining, and Chemicals, added, “We are happy to provide new long-term financing that will support the growth of Magadi Soda, which has a strong presence in emerging markets. The project is aimed at helping the company maintain its position as one of the lowest-cost global soda ash producers. As part of our ongoing commitment to sustainable development, we are also working with Magadi Soda on a community development plan that includes HIV/AIDS prevention and care programs.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
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