The International Finance Corporation (IFC) and a local beverage company have signed a funding agreement to boost production, in a major investment by the Corporation in Sierra Leone’s agribusiness sector.
The funding involves a loan of US$5million, which will allow Kings Beverages, producer of soft drinks and fruit juices, to boost production, create jobs and strengthen the local agricultural value chain through collaboration with local farmers.
The signing ceremony took place at the World Bank Group Country Office in Freetown on Thursday, March 31.
The IFC is the World Bank Group’s private sector funding arm. According to a joint statement, the Corporation will provide US$2.5million of the total loan, while the other half will come from the multilateral financing instrument, the Global Agriculture Food and Security Program (GAFSP).
Kings Beverages, an Indian-owned company, is already a leading player in the beverage sector in Sierra Leone, specializing in non-alcoholic beverages and mineral drinking water. It produces some of the popular brands in the country, such as Mega Cola, Mega Malt, Mummy Fruity, Fresh Up and the popular Commando energy drink.
Kings Beverages currently operates the largest automated beverage plant in Sierra Leone.
Launched in 2020, the company quickly gained significant market share, becoming a well-known local brand, in spite of the effect of the Covid-19 pandemic.
Kishore Kumar Parwani, CEO and Co-owner of Kings Beverages, said at the signing ceremony that Kings Beverages is the result of his desire to bridge a gap in quality in the beverage sector.
Kings Beverages seeks to be the market leader in the soft drink space in Sierra Leone by 2025.
Details of the IFC deal shared with ManoReporters indicate that the company will use the funds to complete construction of its factory in Freetown, introduce new fruit juice products, and double its number of direct employees to 250 over the next three years.
“IFC’s investment gives us the long-term financing we need to build our capacity to serve the fast-growing domestic market and develop a robust supply chain for a sustainable business,” Mr Parwani was quoted in the statement.
The company says it intends to increase its sourcing of raw materials from 40 to 150 local fruit farmers by 2025, an expansion that is projected to create 2,600 induced and indirect jobs throughout the agriculture value chain in the country.
“The IFC is the best partner for us to achieve this,” Mr Parwani noted at the signing ceremony.
The investment, described as the first by the IFC in Sierra Leone’s agribusiness sector, also entails an advisory services component geared towards strengthening Kings Beverages’ occupational health and safety practices, financial and social management, corporate governance, and resource-use efficiency. In addition, the Corporation will help build the capacity of smallholder farmers in food safety, environmental and social standards, and productivity.
Speaking from Washington via a video link, Sergio Pimenta, IFC’s Region Vice President for Africa, said the day marked not just the signing of an important investment but also the beginning of a long and fruitful relation between the Corporation and Kings Beverages.
Mr Pimenta added that the investment reflects IFC’s commitment to the development of the agribusiness sector, noting that it’s also strategic coming at the height of the Covid-19 pandemic, when there is need to strengthen the country’s economy.
Mr Pimenta also said that this investment represents a shift from exporting of agricultural products without significant value added.
“Sierra Leone is an important country for IFC. We’ve been present for a long time, through times that the country went through Ebola, through certain difficulties, including recently Covid. It’s a country that has shown strong resilience and the prospects of the medium term seem quite possible. We are optimistic about the development of the country,” said Mr Pimenta, adding that investments like this are a testimony of where the country is going.
IFC is the largest global development institution focused on the private sector in emerging markets. With presence in more than 100 countries, it uses capital, expertise, and influence to create markets and opportunities in developing countries.
In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic.
IFC‘s operation in Sierra Leone focuses on agribusiness, energy, the financial sector, and mining. It also highlights the increasing role of the digital economy in improving efficiencies and productivity.
Data provided by IFC indicate that the agribusiness sector employs nearly 60 percent of Sierra Leone’s labor force and provides a significant contribution to the GDP.
