38664 - Kioo Glass

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Summary of Investment Information

Project Number

38664

Company Name

Kioo Ltd

Date SPI Disclosed

Apr 13, 2017

Country

Tanzania

Region

Africa

Projected Board Date

May 31, 2017

Environmental Category

B - Limited

Status

Active

Last Updated Date

Feb 16, 2018

Department

Regional Industry - MAS ME & Africa

Industry

Manufacturing

Previous Events

Approved : Jun 5, 2017
Signed : Dec 4, 2017
Invested : Feb 14, 2018

Sector

Glass and Glass Products (Including Glass and Mineral Wool)

Project Description

The Project comprises the planned investment program of Kioo Limited in its existing production facility in Dar es Salaam, Tanzania. Kioo is a leading glass container producer in East Africa and the sole producer in Tanzania.

The key components of the Project include general upgrades and enhancement to plant and machinery and the addition of transportation equipment. Equipment suppliers for the Project are among the best in their respective fields globally.

IFC plans to support the Project by providing senior debt.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	21.0
Equity

Development Impact

1. The Project will support the development of a competitive manufacturing sub-sector capable of generating exports. 2. Stimulate economic activity in Tanzania: The IFC loan will be directed to finance a capital investment program, involving upgrading of the glass container manufacturing plant. Increased and more efficient production will not only stimulate the beverages sector by providing local customized packaging solutions but also boost the intermediate industries in its value chain and vice versa. The multiplier effect of this process will generate greater economic activity, increase economic complexity and competiveness thus providing momentum for Tanzania to continue to progress along in its development path. 3. Increased availability of high quality glass containers in East, Central and Southern Africa as well as Indian Ocean islands. 4. Transfer of technology and best practices to the Tanzanian glass manufacturing sector since the project includes investment in plant and technological upgrades. 5. Increase of foreign currency earnings for Tanzania, as Kioo generates the majority of its revenues, both exports and domestic sales, denominated in US Dollars. 6. Job creation: the direct employment creation in addition to the over 600 people currently employed by the company; the jobs also generate strong skills transfers.

1. Long-term financing: The Project requires long-term US$ financing which is not readily available in Tanzania, during the construction phase and on an ongoing basis for importation of certain raw materials. Given this situation, IFC has a crucial role in ensuring that the financing for the Project is available and it is completed on schedule. 2. Provision of Environmental and Social (E&S) expertise: IFC financing will directly support investments in energy efficiency improvements. IFC will also promote best practices in E&S and Energy Efficiency. 3. Provision of technical and sector expertise: Sharing of global industry expertise and best practices on production techniques and sales/marketing strategies with the client.

E&S Category Rationale / Risks and Mitigation

This project involves the installation of new machinery, rebuild of furnaces, and upgrading of an existing glass bottle manufacturing plant with increased output, better energy and water efficiencies plus reduced emissions within the same surface footprint. Glass bottle manufacturing mainly uses silica sand, which is relatively abundant and easy to mine. The production process generally does not generate much waste. The investment is expected to have limited E&S impacts which are site-specific, and temporary in nature. Accordingly, this is a Category B project as per IFC’s Environmental and Social Sustainability Policy.

Key environmental and social issues and risks for this investment are: assessment and management of E&S impacts associated with the project, management systems and practices for E&S and OHS; working conditions and terms of employment; resource efficiency, water use; air emissions from the furnaces; supply chain; traffic management / impacts on communities and land acquisition for sand mines.

Contacts

For Inquiries About the Project, Contact

Mr. Kumar Krishnan

General Manager, Kioo Limited

kk@Kiooglass.com

Phone number: +255 22 2860 190

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

Mr. Kumar Krishnan

General Manager, Kioo Limited

kk@Kiooglass.com

Phone number: +255 22 2860 190

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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