Kayonza Tea Factory in Uganda, to construct a second workshop

Uganda’s Kayonza Tea Factory is set to construct a second workshop in January next year. This is after the Ugandan Tea Processor secured financing worth approximately US $3.15m in form of a long-term loan from Oikocredit, a social impact investor, with the help of an international civil society organization called Solidaridad.

The proposition of the project

After establishing that Kayonza’s yields warranted a second factory, Solidaridad’s tea experts from East Africa and India together with Kayonza’s management team then developed a business plan and investment proposition using sophisticated financial modelling, and presented the project to potential investors.

Oikocredit was appealed by Kayonza’s focus on social impact and its strong business plan. The social impact investor then consequently worked with both parties (Kayonza and Solidaridad teams) on a loan proposal that would meet the specific needs of the project.

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Kayonza is the first United Nations Development Programme (UNDP) Equator Prize winner. In 2015 the company was selected by UNDP for its efforts to help its local community to adapt to climate change, drive back deforestation and soil degradation, and encourage local people to adopt land management techniques and diversify their crops.

The company is also the first project in Solidaridad’s impact investment pipeline to win financing.

The new plant

The planned plant will be located in nearby Mpungu and it will have a capacity of about 38,000 metric tonnes per year, double the current factory’s capacity, allowing the processor to make the most of growing international demand and government support of the tea industry.

Christopher Turyatemba, the General Manager of Kayonza Tea Factory confirmed that they expect to begin the construction works in early next year and that in two years’ time, the satellite factory will be a reality for the Mpungu community.

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