Introduction
The International Finance Corporation (IFC) has announced a significant partnership with Kioo Tanzania to enhance local glass manufacturing. This collaboration aims to meet the growing domestic and regional demand for glass bottles and containers while promoting sustainable practices and economic growth in Tanzania.
Investment and Environmental Goals
Under the partnership, IFC will provide Kioo with a loan of up to $45 million. This financial support is intended to expand Kioo's manufacturing capacity and reduce its environmental footprint. One of the key environmental initiatives involves increasing the use of recycled glass in the production process, which will help lower energy consumption and reduce waste.
Economic Impact and Job Creation
The project is poised to create thousands of jobs, both directly within Kioo and indirectly along its supply chain. The East African beverage sector, Kioo’s primary market for refillable glass containers, is projected to grow by up to 10 percent annually over the next five years. Despite this growth, the region currently faces a supply gap, with about 40 percent of demand being met through imports. By boosting local production, Kioo aims to substitute imported glass with locally manufactured products, thereby fostering regional industry growth.
Statements from Leadership
Kioo’s Director, Kumar Krishnan, highlighted the longstanding and productive relationship with IFC: “The relationship with IFC has been outstanding over the years and has helped Kioo grow. Kioo is already the largest glass manufacturer in the region and has become a supplier of choice to many of its customers. The new expansion will further boost the beverage industry's growth across East and Central Africa. This investment is a testament to the group's continued belief in Africa and a sustainable future.”
Henrik Elschner Pedersen, Regional Industry Director for Manufacturing in Africa at IFC, emphasized the broader economic benefits: “There is a clear opportunity in East Africa to create jobs by closing the supply gap in the manufacturing sector. Our investment in Kioo will not only directly support this through the company’s increased capacity but will also help strengthen the glass value chain across the region.”
Historical Support and Future Outlook
This investment marks the third time IFC has supported Kioo. Previous loans have enabled the company to expand and upgrade its equipment. As of the end of FY23, IFC had an investment portfolio of $442.1 million and an advisory portfolio of $11.9 million in Tanzania. In FY23 alone, new investments by IFC in Tanzania totaled $115 million.
