New fund lines up billions for investment in Kenyan sectors

Afreximbank President Benedict Oramah said discussions have already commenced on strategic investment projects to be set up in Kenya.

Kenya signed the treaty alongside Chad and Congo.

"The accession to the Feda Establishment Agreement by Kenya, Congo and Chad are important steps that are expected to catalyse more investment by Feda towards these countries' industrialisation and value-add export development," said Prof Oramah in a statement.

"We are delighted to onboard these new member countries and we look forward to mobilising other Afreximbank member states in due time to support Feda's pan-African expansion."

Oramah said the fund creates a powerful catalyst to increase equity and equity-like funding for Kenyan companies that promote industrialisation, Intra-Africa trade and value-added export development.

Feda already has strategic investments in the Congo and Chad via its investment in Arise IIP, which is developing industrial platforms including 'Plateformes Industrielles du Congo' and Laham Tchad.

Under the agreement, Arise IIP will invest Sh21 billion in the development of the industrial zone of Pointe-Noire the second largest city in the Congo and a mineral port. And in Chad, Feda through Arise will help develop new slaughterhouses and tanneries to support livestock development.

"Feda also looks forward to pursuing strategic investment opportunities in the Republic of Kenya," said Feda chief executive Marlene Ngoyi in the statement.

The fund set up with an initial $100-million (about Sh13 billion) will seek "to leverage the role the Cairo-based Afreximbank has played in mobilising trade finance into Africa" to mobilise foreign direct investment (FDI) into the continent.

"The long-term objective of Feda is the provision of equity capital and related financial, non-financial and support services to operators in Africa's tradable and support sectors, with emphasis on activities that support intra-African trade and value-added exports," said Prof Oramah, earlier.

Afreximbank, which finances and promotes African trade, has in the past decade become a significant player in Kenya's economy, having financed big-ticket deals, including national carrier Kenya Airways.

The National Treasury said it was engaging the pan-African lender for possible financial support.

A high-level team from the bank held talks with Treasury Cabinet Secretary Njuguna Ndung'u recently.

"The objective of the mission is to undertake a needs assessment of the Kenyan economy, fill information gaps and further discuss various proposed projects to be approved under the Kenya country programme," said Prof Ndung'u.

Kenya earlier in December inked a $3 billion (Sh390 billion) financing framework deal from Afreximbank.

A technical team drawn from the Kenyan government and Afeximbank was expected to begin working on the structure of the support, according to the bank.

This was announced during a meeting between President William Ruto and Oramah in December.

During the meeting held at State House Nairobi, Oramah said the dank was keen to roll out this package of financing as part of efforts to support Kenya as it navigates the current unprecedented global economic challenges.