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The International Finance Corporation and the CDC Group, the UK’s development finance institution, announced today that they will invest $35 million in Africa Logistics Properties Holding, a Kenyan warehousing firm.

The IFC said the financing will support ALP’s development of modern, grade-A warehousing facilities in Nairobi. The financing consists of $10 million from the IFC and $25 million from CDC Group.

“Introduction of modern warehousing in Kenya will support growth, employment and trade across a range of industries,” said Mary-Jean Moyo, IFC’s Regional Head of Manufacturing, Agribusiness and Services in Sub-Saharan Africa. “With access to quality logistics, global companies will find it easier to ramp up businesses in Africa.”

In Kenya, the trading hub of East Africa, the lack of quality, international-standard warehousing space has long been a constraint on business growth and economic development. In fact, poor warehousing facilities is one of the main reasons the cost of moving goods in Africa is estimated to be on average two to three times higher than in developed countries. Transport costs can count for as much as 50-75 percent of the retail price of goods, according to the IFC.

With quality warehousing, Kenya is expected to benefit from improved operational efficiencies by the reduction of waste from poor storage, increased speed of product delivery, and improved product security.

“CDC is backing ALP because we know that logistics is a critical, yet often overlooked, part of economic development,” said Ilaria Benucci, CDC’s Investment Director. “Investment in agriculture is futile if there is no supply chain in place to get produce to market. Essential medication won’t work if it cannot be transported and stored in the right conditions. Our investment will support a company that’s making trade easier in Kenya and we hope that it can be the start of an expansion into other African cities.”

Founded in 2015, Africa Logistics Properties is an integrated commercial property investment platform based in Nairobi with a principal focus on the emerging logistics and industrial sector across Africa.

ALP is backed by Maris, a Nairobi-based private investment firm that is also investing $8 million alongside IFC and CDC. Other investors joining IFC and CDC include Mbuyu Capital Partners, UK-based Africa-focused asset manager, which is investing up to $5 million, amongst others.

“IFC and CDC not only bring capital and expertise as experienced investors in African infrastructure, but are also both committed to helping ALP deliver modern logistics parks with world-class environmental and social risk management standards,” said Toby Selman, CEO of ALP.