COLOMBO, SRI LANKA (17 December 2021) — The Asian Development Bank (ADB) entered into an agreement to invest up to $80 million (in Sri Lanka rupee equivalent) in John Keells Holdings PLC (JKH) to boost the country’s food value chain 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 multibusiness corporate capital expenditure program, through an initial investment of $50 million with an option to subscribe for additional new shares of up to $30 million within 12 months. The financing will come equally from ADB’s ordinary capital resources and from Leading Asia’s Private Infrastructure Fund (LEAP), which will be administered by ADB.
“The project represents a significant equity investment supporting the growth of a leading company,” said Deputy Director General of ADB’s Private Sector Operations Department Christopher Thieme. “ADB’s investment comes at a critical stage of the country’s recovery efforts and will provide a much-needed boost through a large foreign direct investment that will spur investor confidence in Sri Lanka.”
The investment will support the expansion of the group’s modern retail and distribution businesses, including the construction and equipping of new supermarkets and the setting up of state-of-the-art distribution logistics centers. The investment will strengthen value chain linkages for farmers supplying to markets and enhance food security and safety for consumers.
The equity investment will be accompanied with technical assistance funded by the Canadian Climate Fund for the Private Sector in Asia (CFPS) to train 2,000 fruit and vegetable farmers in climate resilience and organic farming, both critical priorities for the country’s agriculture.
“The transaction is fully aligned with the strategic priorities of the partnership between Sri Lanka and ADB, which highlights the importance of developing our rural areas and the impact of private sector development,” said ADB Country Director for Sri Lanka Chen Chen.
“We are delighted to partner with ADB with this investment in to JKH. JKH will leverage on ADB’s technical expertise and advisory support to enhance and further strengthen our environmental, social, and governance processes and frameworks,” said JKH Chairman Krishan Balendra. “We believe that partnering with an internationally reputed financial institution, such as ADB, particularly at this juncture of time, 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 transport, consumer foods, retail, leisure, property, and financial services.
LEAP was established in 2016 with a $1.5 billion capital commitment from the Japan International Cooperation Agency. It is focused on delivering high-quality and sustainable private sector infrastructure projects to ADB’s developing member countries.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.