NAIROBI, KENYA, DECEMBER 1, 2003
—IFC Executive Vice President, Peter Woicke, who is also Managing Director of the World Bank for Private Sector Development, is visiting Kenya December 1-2. “My visit underlines the importance that IFC attaches to its work in Kenya,” said Woicke. The International Finance Corporation, which is an affiliate of the World Bank, promotes sustainable private sector enterprise in developing countries such as Kenya, through investments and advice.
Mr. Woicke’s program includes calls on the President of Kenya, and the Ministers of Finance, Planning and other Ministers, to introduce IFC’s new Africa strategy, discuss priorities for Kenya, and explore how IFC can help with private sector participation in infrastructure—a key area earmarked for development in Kenya.
Mr. Woicke will also meet the Kenya Private Sector Alliance, representatives from the micro-, small and medium-scale enterprise (MSME) sector, and visit IFC clients, K-Rep Bank, and the Coca-Cola linkage project.
While in Nairobi, Mr. Woicke will sign agreements for a $26 million new investment in Magadi Soda Company Limited, an existing IFC project, which will produce—for export—up to 365,000 tons annually of high purity soda ash, used mainly for glass manufacturing and detergents. IFC’s financing will help to construct a new plant and associated projects and also enable Magadi Soda to continue as a significant foreign exchange earner while providing employment, economic opportunities, and basic social services to local communities surrounding its Kenyan plant.
IFC’s strategic priorities in Kenya include supporting private infrastructure (transport, telecom, and power) projects; strengthening the financial sector by investing in financial intermediaries, non-bank financial institutions, and supporting the creation of new securities; investing in key export sectors such as agribusiness, tourism, and light manufacturing; and providing assistance to MSMEs in collaboration with financial institutions and technical assistance firms.
Since its first investment in 1956, IFC has committed financing to projects in Kenya amounting to $363 million. Investments include $304 million for IFC’s own account and $59 million for the account of banks participating in loan syndications. IFC’s portfolio in Kenya as of October 2003 stands at $132 million.
Some of IFC’s key investments in Kenya include a recent 15% participation in the capital increase of Industrial Promotion Services (Kenya) Limited (IPS), an East African investment holding company owned by the Aga Khan Fund for Economic Development, which will focus on food and agribusiness, printing and packaging, specialized manufacturing, and infrastructure; a $41 million financial package to the Tsavo Power Company Limited in 2000 to build a 74 MW diesel independent power plant in Mombasa, which helps to address the country’s shortage of power and provides a stable and reliable source of electricity; and a recent $15 million financing to Kenya Airways to expand its network, modernize its fleet, significantly increase passenger and cargo services, and support Kenya’s tourism and high-value horticulture export industries.
In addition, IFC works in Kenya and throughout Africa via specialized facilities such as APDF (Africa Project Development Facility) which assists African small and medium entrepreneurs to organize, diversify, and expand their businesses by providing technical assistance throughout the project life cycle; and AMSCO (African Management Service Company) which helps strengthen African enterprises by providing experienced managers and training local management teams. Both APDF and AMSCO have regional offices in Nairobi.
APDF participates in numerous initiatives to help MSMEs, including assisting financial institutions with strategic planning, management, advocacy, capacity building, and the establishment of risk capital. APDF also facilitates linkages between Kenya’s MSMEs and larger corporations to create an environment in which larger corporations will procure services from MSMEs. APDF trains management consultants to deliver appropriate and relevant services to MSMEs that will help develop a program leading to the accreditation of consultants; it also provides corporate governance training for the MSME sector. In addition, APDF provides support to savings and credit societies through access to business services, finance, and creating a business enabling environment which present the best opportunity for extending financial services to the entire population.
APDF’s advisory services are also widening the impact of IFC client Coca-Cola SABCO’s expansion in Kenya, Tanzania, Uganda, Ethiopia, and Mozambique. IFC committed this project in 2002 and its investment to date stands at $20 million. Now APDF is helping SABCO set a winning strategy for working with local SMEs in Kenya who can bring its products into untapped local markets while creating hundreds of jobs The successful Kenyan model is likely to be replicated across the region. SABCO—along with its bottlers, which have instituted several programs on HIV/AIDS awareness and prevention on the African continent—is considered a leading example of corporate social responsibility.
According to IFC’s Nairobi-based Regional Manager for East Africa, Mr. Saleem Karimjee, “This visit will give Peter Woicke an opportunity to sit down with key government leaders, clients, and other IFC partners to share views on what can be done to enhance IFC’s activities and create an enabling environment for entrepreneurship.”
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.
