Kenya: EIB supports cutting-edge cold storage facility

• ARCH Cold Chain Solutions has received funding from a range of financial institutions, including development finance institutions such as the EIB, which provided $15 million.
• ARCH Cold Chain Solutions’ storage facility for perishable goods and pharmaceuticals located in Tatu City, Kenya, is the first of its kind in Africa.
• Plans are underway to expand to other East African countries, namely Uganda, Tanzania, Rwanda and Ethiopia.

The ARCH Cold Chain Solutions Fund has opened the doors of its flagship cold storage facility in Tatu City Special Economic Zone (SEZ), Nairobi, Kenya. The facility consists of a state-of-the-art, temperature-controlled facility as well as a fleet of vehicles for the storage and distribution of perishable food products and pharmaceuticals.

The facility is the first of its kind in Africa due to the flexibility of its services, the product ranges it can accommodate, and the temperature ranges within which it can operate.

The cold storage facility is expected to contribute to the reduction of food waste and enhance safety standards in food distribution in East Africa. The Food and Agriculture Organization of the United Nations (FAO) estimates that around 37% of food produced in sub-Saharan Africa is lost at various points along the value chain.

The ARCH Cold Chain Solutions Fund received resources from a range of financial institutions, including the European Investment Bank (EIB), which contributed $15 million of the total funding of $81 million raised.

The flagship facility of the fund in Kenya targets five core sectors in providing cold storage and temperature-controlled solutions to potential customers in horticulture, meat, poultry and seafood, as well as food manufacturing, supermarkets, quick-service restaurants/ hotels and pharmaceuticals. The facility covers 17 700 m³ and can accommodate up to 18 000 pallets, equivalent to 18 000 tonnes of goods at full capacity.

The unique facility is built to the Leadership in Energy and Environmental Design (LEED) Standard, aiming for a LEED Gold Certification. This would make it the first facility with LEED Gold Certificate in Africa. It will source up to 30% of its energy provision needs from off-grid renewable power production, mainly using solar photovoltaic energy, seeking to minimise climate impacts.

The facility aims to serve both export and import markets in the Eastern African region operating in perishable goods, and its logistics system has the capability to monitor and trace products from their point of origin all the way to their final destination.

During the visit for the opening by the EIB senior team, Managing Director and Co-Head of ARCH Cold Chain Solutions East Africa Fund Fredd Kambo remarked: ‘’Our objective is to create a meaningful impact on food safety at all stages of distribution and mitigate food loss. Our strategic expansion plan encompasses Mombasa, Kigali, Dar es Salaam, Addis Ababa and Kampala. We take pride in our noteworthy accomplishments, particularly in upholding stringent standards of quality and environmental, social and governance principles. We firmly believe that achieving the highest possible standards is imperative for our facilities. Our sincere appreciation extends to our valued investors, with a special acknowledgement of the pivotal role played by the EIB in our endeavours.’’

Head of EIB Regional Hub for Eastern Africa Edward Claessen said: “We at the EIB are very proud to be a supporter of ARCH Cold Chain Fund. The facility they have set up is unique in the quality and flexibility it offers for cold storage of produce. We are glad that it is going to address a real need to reduce wastage and set global food safety standards in the region.  While the recent downturn in the economy has sometimes been discouraging private investment across the continent, this is a great showcase of what support to the private sector can achieve.”

ARCH Cold Chain Solutions is focusing on developing and operating large-scale energy-efficient cold chain solutions with a logistics and distribution network to support the whole Eastern and Central African region. It has set its sights on expanding into Mombasa (Kenya), Kigali (Rwanda), Dar es Salaam (Tanzania), Kampala (Uganda), and Addis Ababa (Ethiopia). The aim is to reach a combined capacity of 100 000 tonnes in cold storage space.

Background information

About EIB support for private equity funds

The European Investment Bank has committed over €2.5 billion to 124 funds (private equity, infrastructure and microfinance) with a geographic focus on Africa. Some of these funds are country-specific, while some have a regional or even a global geographic focus. They have jointly provided financing (equity and/or debt) to around 1 500 investees (microenterprises, small and medium companies (SMEs), mid-caps and infrastructure projects) in Africa.

About ARCH Cold Chain Solutions Fund

ARCH Cold Chain Solutions East Africa Fund (CCSEAF) is a fund launched by ARCH Emerging Markets Partners Limited, an emerging market specialist firm founded in 2018. CCSEAF’s primary objective is to reduce food loss, increase food security and improve economic development across Africa. The fund focuses on designing, building and operating multi-purpose, state-of-the-art, temperature-controlled storage facilities across East Africa. Each facility in the region will be complemented by a fleet of temperature-controlled trucks that will assist with maintaining the end-to-end cold chain through inner city and long-haul routes, transforming the landscape of East Africa's supply chain and logistics industry.