Nairobi, Kenya, 17 November 2003 - Industrial Promotion Services (IPS) today announced a capital increase of USD 32.4 million (KSh 2.5 billion) for investments in East Africa to be funded principally by three leading institutional shareholders.
The Aga Khan Fund for Economic Development (AKFED), (a member of the overall Aga Khan Development Network), and affiliated entities will, upon completion of the new investment, hold 51% of IPS's share capital, the International Finance Corporation (IFC) will hold 15% and DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH will hold 14.5%, with the remainder being held by other institutional and individual investors.
Prince Amyn Aga Khan, Chairman of the Executive Committee of AKFED joined Ms. Haydee Celaya, Director, Sub-Saharan Africa Department of IFC and Mr. Winfried Nau, First Vice President New Business Africa of DEG at a ceremony here today to formalise the investment agreement among the three institutions.
"AKFED's decision to lead such a substantial new capital investment in Eastern Africa is an indication of its commitment to increase economic opportunity, even in difficult times and to help address needs of sectors currently considered of national and regional priority, such as infrastructure, while continuing to promote corporate social responsibility," said Prince Amyn.
"The expansion of IPS will enable it to play an important role in providing equity capital and strategic direction to companies in East Africa. IFC values the contribution which IPS has made to development in the region and we look forward to continuing our long and fruitful relationship," added Ms. Haydee Celaya.
"We see our investment in IPS as a sustainable contribution to the promotion of the industrial sector and to the development of better infrastructure services in Kenya, Tanzania and Uganda. As a partner of IPS we can benefit from its long experience in the management of private enterprises in Eastern Africa," said Mr. Winfried Nau.
The newly committed capital will enable IPS to strengthen its position in key sectors such as food processing/agribusiness and printing/packaging, as well as to expand its activities in infrastructure services where considerable need for private sector investment has been identified by governments in the region.
IPS has been providing venture capital, technical assistance and management support with the objective of encouraging and expanding private enterprise in Eastern Africa since the early 1960s. Currently investing in over 20 projects in the region, IPS is widely recognised for its professional management capability, its track record in project development and for promoting investment with a social conscience. IPS companies in East Africa include Allpack, Farmer's Choice, Tsavo Power, Alltex EPZ and Frigoken in Kenya, Uganda Fishnet Manufacturers, Kampala Pharmaceuticals and West Nile Rural Electrification Co in Uganda, and TLL Printing & Packaging and Moshi Leather Industries in Tanzania.
AKFED is the economic development arm of the Aga Khan Development Network, a group of private, non-denominational development agencies seeking to improve opportunities and living conditions in specific regions of the developing world, especially Africa and Asia. Its companies have been active in Eastern Africa since 1936, expanding into Central and West Africa over the following decades. Active in the fields of industry, financial services, tourism development, infrastructure, media and aviation in 19 countries across South and Central Asia and sub-Saharan Africa, AKFED operates as a network of affiliates with more than 100 separate project companies employing over 18,000 people and controlling assets in excess of US$1.5 billion.
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilises capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. It is one of the original shareholders of IPS and continues to support and invest jointly with IPS in various projects.
DEG, a member of KfW group, has been specialising in long term projects and corporate financing for 40 years. DEG finances investments of private companies in developing and transition countries. It promotes private business structures to contribute to sustainable economic growth. DEG has also been an active investor in Kenya with actual commitments of approx. 40 million Euros and has co-financed recent projects initiated by IPS.
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The Aga Khan Development Network is a group of private, non-denominational development agencies and institutions that seek to empower communities and individuals, often in disadvantaged circumstances, to improve living conditions and opportunities in specific regions of Africa and Asia. Active in over 20 countries, the Network's underlying impulse is the ethic of compassion for the vulnerable in society and its agencies and institutions work for the common good of all citizens, regardless of origin, gender or religion.