Kenya Aims to More Than Double Foreign Investment This YearDavid Malingha Doya
Kenya, East Africa’s biggest economy, aims to more than double foreign direct investment this fiscal year as it invites bids to build power plants and sells state-owned companies.
FDI may climb to $1 billion in the year through June from about $400 million a year earlier, Industrialization Secretary Adan Mohamed said yesterday in an interview in the capital, Nairobi. “We expect private funding for power generation to dramatically increase FDI flows,” he said.
Kenya will target the same amount of investment in the next fiscal year, according to a presentation e-mailed by Mohamed’s office. FDI was equal to 1 percent of gross domestic product in 2011, compared with 4.6 percent and 5.3 percent in neighboring Tanzania and Uganda, respectively, the report said.
Kenya’s Energy Ministry is in the process of procuring contractors for the development of a 960-megawatt coal-fired electricity plant and a 700-megawatt natural gas-powered facility. The two projects are part of a plan by the government to increase generation fourfold to 7,200 megawatts at an estimated cost of $15 billion by 2017.
The government expects to attract 9.5 billion shillings ($109 million) of investment as it sells mainly agriculture-based companies to private investors, according to the statement. The government is in the final stages of finding an investor for Pan African Paper Mills and it’s in the process of selling sugar factories, Mohamed said.
The government estimates Pan African Paper Mills, which currently isn’t operating, will require an investment of 1 billion shillings.
Kenya has seen investment flow into emerging industries such as oil and gas, where recent crude discoveries could generate about $10 billion in revenue over three decades of production, London-based GlobalData said today in an e-mailed note. Foreign interest in the country’s oil and gas industry has “intensified” over the past two years since Tullow Oil Plc and Africa Oil Corp. announced Kenya’s first oil discoveries, the research group said.