The International Finance Corporation (IFC) is providing a $3 million (Sh309.8 million) loan to fund the expansion of Goodlife Pharmacy in Kenya and Uganda.
In a notice, the institution says the loan was part of the funding needed for the pharmacy to grow its footprint from the current 32 to 100.
IFC estimates that the total project cost will be between $15 million (Sh1.5 billion) and $20 million (Sh2 billion).
IFC says Goodlife’s major shareholder, private equity firm Leapfrog, plans to bridge the rest of the funding gap through its own money and by sourcing financing from third parties.
Leapfrog acquired controlling interest in Goodlife last year after buying out another PE firm, Catalyst, at a cost of Sh2.2 billion. At the time, Leapfrog committed to the expansion plan.
“As part of Leapfrog’s business plan, it plans to both inject and mobilise capital into Goodlife in order to scale up the business, and have asked IFC to participate,” writes the World Bank’s private lending arm in its disclosure note.
This is the second time IFC is investing in Goodlife. In 2015, the international financier gave Goodlife a $4.5 million (ShSh464 million) loan that helped the company expand its network from six outlets to 20 outlets.
IFC says that those funds, which were disbursed in two tranches, were used to fund acquisitions and greenfield projects.
In December last year, the Competition Authority of Kenya (CAK) approved Goodlife’s planned acquisition of Dan Pharmacie. Competition is ramping up in this sector, as foreign capital fuels expansion.