Norfund is investing in two textile manufacturers in Kenya, in line with their aim to create jobs and improve lives through investing in sustainable businesses.
According to William Nyaoke, Norfund’s regional director for East Africa, the textile industry can create a large number of jobs that give the fast-growing young population the opportunity to work their way out of poverty. “The COVID-19 pandemic and increased perception of political risk have increased the pressure on differentiation and developing alternatives to Asian textile production. Africa has a unique possibility to use this moment to develop more of the millions of jobs needed for the continent’s young and growing population, and this has to happen in a sustainable manner”, he said.
Norfund together with Ethos Mezzanine partners, one of Africa’s most renowned investment companies, have invested USD 25 million (12,5 million each) in the Balaji Group. This group is one of the leading manufacturers of clothing in Sub-Saharan Africa, with 12000 employees, and produces clothing for international brands such as Wrangler, Lee, and H&M for both the local Kenyan and for export market.
The goal is to create at least 6000 new direct jobs and a further 6000 indirect jobs in the company. The investment will also serve to finance new modern washing machines that will triple production capacity, while reducing electricity use by 20-30%, water consumption by 70% and chemical use by 60%. The company has installed East Africa’s largest rooftop solar plant of 1.8 MW to cover large parts of its energy needs, cutting 30% of its energy bills.
Norfund’s second investment of USD 14 million into Hela Apparel Holdings PLC, a Sri Lankan apparel supply chain solution provider with a global manufacturing footprint, which has established itself in Kenya, Ethiopia and Egypt, will support additional investment in the Kenyan manufacturing facility. The organisation currently employs 10000 people, and this investment is set to enhance productivity and create new employment opportunities to build a sustainable local supply chain in East Africa.
For more information visit www.norfund.no
