Hela Kenya Receives 1.8Billion In Funding From the Norwegian Government
Hela Apparel has received funding in billion Shillings from Norfund, the Norwegian government’s investment fund. With a mission to support sustainably driven business operations in developing countries, the investment fund has signed a USD 14 million financing agreement with Hela Apparel Holdings PLC. NDBIB, Sri Lanka, was the Financial Advisor for the transaction.
Hela Kenya, established in 2016, is the largest manufacturing facility within the Hela Group and employs over 4,000 people. The facility currently produces approximately 20% of the country’s total apparel exports. Hela was the first major Sri Lankan apparel manufacturer to establish operations in Kenya and has played a leading role in the rapid growth of the industry across the continent over recent years, with the subsequent establishment of manufacturing locations in Ethiopia and Egypt.
The intended investment in our Kenyan manufacturing facility, which will be supported by this lending from Norfund, is a key part of the Group’s strategy to remain globally competitive. On behalf of the Board of Directors, I would like to take this opportunity to thank Norfund for their partnership and support towards the organization’s vision,” said A.R Rasiah, Chairman of Hela Apparel Holdings
The proceeds from Norfund’s investment will be utilized to strengthen Hela’s strategic supply chain partnerships in East Africa. This will enable Hela to leverage regional sourcing from Kenya and Tanzania to a larger extent, providing significant cost and lead time advantages for manufacturing in the region. A potential supply chain investment is also being considered by Hela for the proceeds. Proposed Capex investments within the Kenyan manufacturing facility on process automation will enhance productivity and place the facility in a more competitive position within the region.
“Given the increasingly unpredictable global environment, establishing long-term financing relationships with strategic partners who share our vision for Africa as a global apparel sourcing hub plays a critical role in ensuring the envisioned plans for growth are realized,” added Rasiah
“We see great opportunities in contributing to large-scale job creation in East Africa by investing in the apparel and textile industry, in line with our goal of building sustainable businesses to combat poverty. We have been impressed with what Hela has already delivered through its investments in East Africa and are confident that this partnership will go a long way in helping Hela create more employment opportunities primarily for low-skilled women and those vulnerable in society who struggle to find such opportunities. We look forward to a fruitful partnership in the years to come”, says William Nyaoke, Norfund’s Regional Director for East Africa.
Norfund is one of the largest shareholders of the ultimate parent, NDB Bank. The wealth of knowledge gained from prior dealings with Norfund and other DFIs has enabled the firm to successfully execute this transaction, which is Hela’s first fundraising via a DFI. “We are extremely pleased to have advised Hela in our debut transaction in the African Region and look forward to working with them in realizing their plans in Africa,” stated William Nyaoke