Kenya has gleefully enjoyed increase in investments made by the International Finance Corporation (IFC) during the financial year of 2012/2013, which is almost triple the investment made in the previous years. Thus almost 80 percentage of IFC’s financial investment was contributed to the East Africa’s financial needs during the current year.
As we all know IFC is the investment branch of the World Bank and it has invested around $456 million (Sh39b) in different Kenyan private sector companies in the form of both equity and debts. This marked a significant exceeded the $158 million investments made by International Finance Corporation in this country’s firms during the financial year 2011/2012.
IFC had invested around $568 million (Sh49.42b) last year and the neighboring country Kenya got a right share of $112 million (Sh9.74b). IFC chooses the promising global companies and firms that require financial support and invest in those companies by either buying or advancing loan to them.
The IFC institution announced that it was interested in investing more in Kenya region but was disappointed since they were not able to spot much projects for investment purpose through both equity or debt form.
Oumar Seydi the IFC director for Eastern and Southern Africa noted that the institution was advancing more investment money to the companies located in Kenya with the chief target to mark their regional presence.
He said, “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,”
Though the private sectors in Kenya have only little opportunities to thrive the IFC decides its investment sector based on the particular company’s activities and performance.
Major portion of the Kenyan investment money was contributed to the agricultural, financial and energy sectors respectively.
About $50 million of the IFC loan amount was given to the Kenya Power sector in order to aid the energy distributor to expand wide its awesome network. This would help in spreading the power supply to more than half a million by the year 2014 to new fresh households in this region. The 90-megawatt Mpeketoni Wind farm in Lamu County is being planned to be developed by Electrawinds the Belgian company and the financial institution IFC jointly.
IFC had also offered a $20.7 million loan amount to a private power producing company the Gulf Power in order to assist them in starting the new 90MW thermal power plant in Thika. The IFC institution also made an investment of $4 million equity on the AAR Health Care Sector that is expected to open new hospitals and other health services in Kenya and other East African countries eventually.
The institution also had provided an investment amount of about $12 million for the Kenya Tea Development Agency ( KTDA) in order to build up in Mombasa around 200 000 square foot warehouse exclusively. In this way more capacity will be provided for KDTA where surplus tea could be stored and then exported from those of factories that are widespread across the country.
The Gulf African Bank was invested with $5 million by IFC. The Kenya Commercial Bank received $108 million for trading finance. And mortgage lender Housing Finance received a loan amount of $20 million.
Seydi said, “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,”
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