7.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.50
Equity

* These investment figures are indicative

Assessment of Project Outcomes: - Economy-wide effects: The Project is expected to contribute to economic activity, direct job creation, and preservation of the existing high-quality jobs (1,000 employees) and the broader social fabric that the operations of the Company and the salaries contribute to. The Project also indirectly supports jobs and economic activity for local businesses that engage in the distribution of final products and sourcing of raw materials. - Stakeholders: Consumers in Kenya, Uganda and Malawi will benefit from improved affordability and access to a high-quality variety of bedding products. The Project will achieve this through (i) debt refinancing and expansion of raw materials storage capacity which will lower procurement cost of raw materials as a result of better working capital management, translating into improved affordability of final products sold; (ii) increased assistance to SMEs distributors through access to trade credits, which will intensify linkages in the value chain; and (iii) expansion in the number of retail distributors across the target countries as the Company grows its production. Assessment of Contribution to Market Creation: - Competitiveness: IFC anticipates that the investment will promote sector competitiveness in Malawi via the adoption of innovative manufacturing processes. Through the Project, MFA will expand its production capacity in Malawi, adopt novel technology and machinery, increasing its overall efficiency. Market impact in Kenya and Uganda is expected to be limited.

Financial Additionality: (i) Cross-Border Financing: IFC will help complete MFA’s strategic consolidation of its three operating subsidiaries, by regrouping at the corporate level all its long-term financing yielding centralized cash management; (ii) Loan Terms: IFC will provide a long-term loan with a 2-years grace period, which will reduce its vulnerability to domestic financial and banking shocks as well as enhanced working capital management. (iii) Resource Mobilization: IFC will help mobilize additional debt for the Company. Non-Financial Additionality: IFC will introduce its Lean Manufacturing Advisory to the Company as a possible complement to IFC’s financing to improve productivity.

This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Based on information reviewed by IFC, the proposed project will have limited adverse E&S impacts that are few, site specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP).

 

Key potential E&S risks associated with this Project include: (a) continued adequacy of the Company’s E&S staffing and E&S management systems to ensure operations are aligned with and meet the objectives of IFC Performance Standards (PS’s); (b) assurance of fair, safe and healthy working conditions, including those related to life and fire safety and gender based violence (GBV), in line with PS2 requirements; (c) occupational health and safety including work place monitoring and health checks for workers; (d) air emissions from the chemicals used to make the foam, waste and chemicals management to ensure  compliance with the requirements of the PS’s and applicable limits defined in the World Bank Group EHS Guidelines; and (e) community safety, security management, on/off-site emergency response, road safety, stakeholder engagement and external grievance management.

 

Key areas with high contextual risks areas in the Project countries of operation that could contribute to risks include internal conflict (thereby requiring security measures), access to basic services and infrastructure (impacting productivity), and other risks associated with general compliance within the labor force and supply chain risks (also impacting productivity). Also, Malawi is reported to have high risks of gender-based violence (GBV). No specific negative media coverage was identified in relation to the Company in their market areas.      

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.