IFC Provides US$120 Million Loan to Tiendas Ara to Support Expansion in Colombia's Discount Retail Market

Bogota, Colombia. November 12^th, 2024. The International Finance Corporation (IFC), a member of the World Bank Group, has announced a sustainability-linked loan of up to US$120 million to Tiendas Ara, a leading discount segment retailer in Colombia, to support the construction of two EDGE-Advanced certified distribution centers in the Bogota and Cali regions.

The loan will enable Tiendas Ara, owned by the Portuguese company Jeronimo Martins, to expand its logistics network and with-it new stores in medium and small cities, thereby increasing access to affordable and high-quality retail services for a wider consumer base. The new distribution centers in Bogota and Cali will enhance the company's logistics capabilities, inventory management systems, and overall operational efficiency.

Tiendas Ara has positioned itself as relevant food retail player in Colombia, serving middle and low-income families. The value proposition of Tiendas Ara revolves around offering customers a convenient, affordable, and quality-driven shopping experience. With a network of 1,349 stores across 24 out of 32 departments and 374 municipalities, the company has established itself as a key player in retail market.

"We are pleased to support Tiendas Ara in their expansion efforts and contribute to the development of Colombia's retail sector," said Elizabeth Martínez de Marcano, IFC´s Regional Director for Colombia, Mexico, Central America and the Caribbean. "This investment aligns with our strategic objectives of promoting inclusion, innovation, and sustainability. We believe that by supporting Tiendas Ara's expansion, we can enhance access to affordable retail services and contribute to Colombia's economic development."

"Eleven years ago, we committed to democratizing access to food and other high-quality products in Colombia, and we work on a daily basis to deliver on our vision." Nuno Sereno, general director of Jeronimo Martins Colombia, continued: “Our long-term commitment in the country is upheld by this loan, which also underlines our best practices in social and environmental issues. Our logistics network will be strengthened by the establishment of two new distribution centers in Cota and Cali, which will enable us to supply hundreds of stores, providing Colombian families access to food with the best prices in the market. IFC has been a relevant partner in our goal of being Colombia's top retailer.”

Colombia's economic growth in recent years has not reached all segments of the population, with poverty and inequality remaining persistent challenges. The inflationary pressures, particularly on food items, have disproportionately affected the poor and vulnerable groups. In this context, the modern retail sector, especially the discount market segment, has become increasingly relevant as consumers seek value-conscious options and affordable brands.

Furthermore, the distribution centers will be constructed to meet EDGE-Advanced green building certification standards, ensuring energy efficiency and sustainability. The project is expected to result in a 40 percent reduction in energy consumption and a 20 percent reduction in water usage, contributing to Colombia's climate change goals.

By investing in the expansion of a retailer that caters all segments of the population but especially low and middle-income consumers, IFC aims to improve access to quality services and enhance productivity in the retail sector.

About Tiendas Ara/Jeronimo Martins

Ara is the nearby store with Colombian spirit, atmosphere, and flavor that offers quality products at the lowest prices. It opened its first store in 2013 and today has 1349 stores throughout the country. Its own brands and wide variety of industrial brands have been developed under a cooperation model with local suppliers, offering a unique value proposition for Colombian consumers around the country. Tiendas Ara leverages sustainable investments and employment in the regions where it has a presence, and today it is one of the most relevant companies in the country supporting its economic, social, and environmental development.