Ruto to commission key power infrastructure at Naivasha SEZ

Members of the National Assembly Committee on Trade, Industry and Co-operatives tour the Special Economic Zone (SEZ) in Naivasha. [Antony Gitonga, Standard]

More than a dozen investors have committed to invest in the Naivasha Special Economic Zone, with the initial firm expected to start the process of settling in April. This brings closer to reality the zone that is expected to be a major hub in the country. 

The firms that are ready to set up are projected to create over 3,000 jobs in the coming years. 

President William Ruto is today expected to commission a power grid substation at the Naivasha SEZ that will operationalise the zone. 

The government said it has already secured 16 investors, mostly manufacturers keen on taking advantage of the cheap electricity that the SEZ is expected to offer. Six of these have committed to pumping upwards of Sh20 billion ($130 million) into building facilities at the SEZ.

Abubakr Hassan Principal Secretary for Investment Promotion said that the Naivasha economic zone would be all about job opportunities and the Kenyans will highly benefit from the economic zones.

He added that the choice of Naivasha for the economic zone was largely due to the ability to provide firms with cheap electricity. 

“Electricity is a key factor that investors consider and here, they will enjoy the lower tariffs that will assist them reduce the cost of production,” he said ahead of today’s event. 

SEZs including Naivasha have a special tariff, paying an energy charge of Sh10 per unit of electricity before variables such as inflation and fuel adjustments as well as taxes are added. This is substantially lower than the Sh14.70 that some industries pay and Sh21 that households pay per unit of power before the other components are factored in.

“The other thing is that the area is central, so it will be easier for them to transport the products to Eastern Africa countries,” said Hassan. In addition to the road network, the SEZ is also served by the Standard Gauge Railway from Mombasa to Naivasha and the metre gauge railway line from Naivasha to Malaba. 

The PS said 16 investors who have shown interest in setting up at the Naivasha economic zone and the first investor will be coming in from April this year.

Ken Chelule, chief executive Special Economic Zones, said the SEZs including Naivasha are key for job creation. 

“A key consideration for us when looking at investors is how many jobs you will create for the people. There are other factors like how much the government will earn in terms of taxes but people being beneficiaries is a priority,” he said.

The government spokesperson Isaac Mwaura said the government is positioning SEZs to attract Foreign Direct Investment (FDI). He noted that Kenya has emerged as the number one recipient of start-up capital in Africa and the government is building on these gains.

“The Kenya Kwanza administration has a target of raising over $10 billion (Sh1.6 trillion) in FDI, in the medium term,” he said.

“The Special Economic Zones such the one in Naivasha thus crystallises all the government incentives for a foreign investor into a one-stop shop, complete with all the needed amenities such as cheap power and tax holidays, over and above other infrastructural installations.”