In East Africa, publicly listed electric utility Kenya Power is urging local manufacturers to respond to a request for proposals to supply materials for the development of the Last Mile Connectivity Project.
The tender released last month following the Kenyan government securing additional financing from the African Development Bank calls for local manufacturers to supply materials for the Last Mile Connectivity Project, which aims to connect 284,200 residential customers and 30,000 commercial customers to the national electricity grid.
Dr Ben Chumo, managing director and CEO of Kenya Power, said: “We hope that a high percentage of the materials to be procured will be sourced locally. Kenya Power has a strong desire to have manufacturers investing locally to cut on long lead times involved in buying goods from abroad as well as create local business opportunities.”
Kenya procurement budget
Chumo said that the power company spends an estimated 80% of its annual procurement budget, which amounted to $63 million last year, on materials procured overseas mainly from India and China.
According to Chumo, Kenya Power relies on foreign suppliers for materials ranging from major power equipment such as power transformers, electric cables, metering solutions, insulators and electricity management systems to accessories such as cut-outs, fuses and circuit breakers.
“In support of the Government’s ‘Buy Kenyan Build Kenya’ plan, Kenya Power now procures its electricity poles, both wooden and concrete, locally. It is a departure from the past when most of these were procured from such countries as South Africa and Tanzania”, Chumo said.
He adds: “This move has seen over 40 local companies get involved in the treatment of wooden poles and production of concrete poles.”
Besides a ready market in East and Central Africa, Dr Chumo said demand for these items is expected to rise as the country accelerates the rate of connectivity to over 70% in the short term.
Chumo concluded: “We are also undertaking major power upgrade projects countrywide and also implementing slum electrification and street lighting programmes on behalf of the government.”
He added: “These will require a lot of materials and therefore investors willing to set up manufacturing plants in Kenya for these materials stand to gain significantly now and in a foreseeable future.”