Proparco invests US$31.5mn into Kenya's leading modern retail chain

24 Jul 2022

Proparco, is pleased to announce its partnership with IBL Group, the largest conglomerate of Mauritius (listed on the Mauritius Stock Exchange), and DEG, a subsidiary of German KfW Group, to jointly acquire a 40% interest in Naivas International, which owns 100% of the shares of Naivas Ltd, a leading modern retail chain in Kenya. Successful completion of the transaction is subject to conditions.

Established in 1990 by the Mukuha family, Naivas started as a small family business in the small town of Rongai, located on the outskirts of Nakuru town in Kenya’s Rift Valley. From 2001, the company expanded to Nairobi where it opened its first branch on Ronald Ngala Street. The activity of Naivas then progressively migrated to Nairobi through subsequent openings and selective acquisitions of locations to become today a leading retailer in Kenya.

Naivas is seen as a truly Kenyan brand and has remained consistent to its original motto “Naivas saves you money”, making it a leading modern grocery player and store brand across customer categories and regions in Kenya. Building on its strengths, the group plans to pursue its expansion strategy from its existing 84 stores’ network.

Through this transaction, Proparco is supporting the growth of a leading home-grown company with a view to develop further the modern retail market in Kenya across various formats, catering for the local population’s needs and increasing demand for food quality and safety. This expansion is also conducive to creating jobs, increasing local supply across the value chain, and generating income for the local communities.

By co-investing into Naivas alongside the IBL Group, Proparco would be accompanying a longstanding business partner in its regional expansion, as part of its ‘Beyond Borders’ strategy, whereby IBL has earmarked the retail sector as one of several investment avenues for its East African expansion. Indeed, IBL Group has expertise in this domain, operating the leading supermarket chain in Mauritius, Winners.

Finally, this transaction also offers Proparco the opportunity to provide targeted expertise to Naivas and its stakeholders on environmental, social and governance (ESG) matters, and to drive positive impact contribution in respect of improving energy efficiency, as well as further developing the local eco-system involving suppliers of the Naivas store network.

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