Nairobi — Norfund, the Norwegian government's investment fund, has signed a USD14 million(Sh1.7 billion) financing agreement with Hela Apparel Holdings PLC to support the development of the firm's operations in East Africa.

The proceeds from Norfund's investment will be utilized to strengthen Hela's strategic supply chain partnerships in East Africa.

This will enable Hela to leverage regional sourcing from Kenya and Tanzania to a larger extent, providing significant cost and lead time advantages for manufacturing in the region.

"Our expansion to Africa has been a rewarding venture, and we continue to see many opportunities within the region for further development," said A.R Rasiah, Chairman of Hela Apparel Holdings.

"Given the increasingly unpredictable global environment, establishing long-term financing relationships with strategic partners who share our vision for Africa as a global apparel sourcing hub plays a critical role in ensuring the envisioned plans for growth are realized. The intended investment in our Kenyan manufacturing facility, which will be supported by this lending from Norfund, is a key part of the Group's strategy to remain globally competitive," he further added.

Hela Kenya, established in 2016, is the largest manufacturing facility within the Hela Group and employs over 4,000 people.

The facility currently produces approximately 20 per cent of the country's total apparel exports.

"We see great opportunities in contributing to large-scale job creation in East Africa by investing in the apparel and textile industry, in line with our goal of building sustainable businesses to combat poverty. We are confident that this partnership will go a long way in helping Hela create more employment opportunities," says William Nyaoke, Norfund's Regional Director for East Africa.