The International Finance Corporation (IFC), the private-sector development arm of the World Bank, has announced its plans to lend Ksh. 2.7 billion ($25 million) to Stellar Warehousing and Logistics Limited. Stellar Warehousing is a real estate development company in Kenya.

The funds will go toward the purchase of an industrial facility with vacant land in Mlolongo area from its current owner Orbit Products Africa Limited (OPAL).

In addition to acquiring the property, Stellar Warehousing and Logistics Limited will renovate the industrial facility. After reconstruction, the company will construct a new facility on the vacant land and lease back the entire property to Orbit Products Africa.

According to information on the IFC website, Orbit Products Africa Limited “is an established regional manufacturer of popular personal care and home care products for multi-national clients in East Africa.”

The total cost of the project is estimated at Ksh. 5.6 billion ($52.6 million), and the International Finance Corporation will finance 48% of the project by offering the Ksh. 2.7 billion ($25 million) loan.

Stellar Warehousing and Logistics Limited, the borrower of the IFC loan, is a Kenyan subsidiary of Grit Real Estate Income Group Limited (GREIG), a real estate company listed on the London Stock Exchange and the Stock Exchange of Mauritius. The company is growing its investments in income-generating projects across Africa.

Warehouse financing, such as this one by IMF allows banks to shift risk from borrowers’ fixed assets to the commodities that farmers produce. It also allows farmers to enhance their income by having more flexibility in timing sales to protect against price seasonality. After renovation, Stellar Warehousing expects to make a notable profit after leasing.