COLOMBO, SRI LANKA (December 17, 2021) – The Asian Development Bank (AfDB) has reached an agreement to invest up to $ 80 million (in Sri Lankan rupee equivalent) in John Keells Holdings PLC (JKH) to boost the chain food value of the country and promote economic growth and job creation.
The investment will be a two-phase private placement to support the expansion of JKH’s modern retail and distribution infrastructure as part of a multi-company enterprise capital spending program, through a initial investment of $ 50 million with option to purchase additional new shares of up to $ 30 million in 12 months. Funding will come in equal parts from the ordinary capital resources of the AfDB and the Leading Asia Private Infrastructure Fund (LEAP), which will be administered by the AfDB.
“The project represents a significant equity investment supporting the growth of a leading company,” said Christopher Thieme, Deputy Managing Director of the AfDB’s Private Sector Operations Department. “The AfDB’s investment is at a critical juncture in the country’s recovery efforts and will provide a much needed boost through significant foreign direct investment that will boost investor confidence in Sri Lanka.
The investment will support the expansion of the group’s modern retail and distribution activities, including the construction and equipping of new supermarkets and the establishment of state-of-the-art logistics distribution centers. The investment will strengthen the value chain links for farmers who supply markets and improve food safety and security for consumers.
The equity investment will be accompanied by technical assistance financed by the Canadian Climate Fund for the private sector in Asia (CFPS) to train 2,000 fruit and vegetable producers in climate resilience and organic farming, two essential priorities for the country’s agriculture.
“The transaction is fully aligned with the strategic priorities of the Sri Lanka-AfDB partnership, which highlights the importance of the development of our rural areas and the impact of private sector development,” said Chen Chen, Country Director AfDB for Sri Lanka.
“We are delighted to partner with ADB with this investment in JKH. JKH will leverage ADB’s technical expertise and advisory support to further improve and strengthen our environmental, social and governance frameworks and processes, ”said JKH President Krishan Balendra. “We believe that partnering with an internationally renowned financial institution, such as AfDB, especially at this stage, is a vote of confidence for JKH and the country.”
JKH is one of the largest listed companies on the Colombo Stock Exchange, with business interests primarily in transportation, consumer food, retail, entertainment, real estate, and financial services.
LEAP was established in 2016 with a capital commitment of $ 1.5 billion from the Japan International Cooperation Agency. It focuses on delivering high quality and sustainable private sector infrastructure projects to developing ADB member countries.
The AfDB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while continuing its efforts to eradicate extreme poverty. Founded in 1966, it is owned by 68 members-49 from the region.