Kenya is the largest and the most advanced economy in East and Central Africa; with strong growth prospects supported by an emerging, urban middle class and an increasing appetite for high-value goods and services.
STRONG AND LARGE REGIONAL PLAYER
Kenya is the dominant economy in the East Africa Community, contributing to more than 50 per cent of the region’s GDP.
Growing consumer market
Kenya has the second largest population within the EAC at 43 million and is growing at a rate of 2.7 per cent per annum. There is a rising trend towards urbanization, which is contributing to an increase in consumer demand for high value goods. This trend is forecasted to continue, with 50 per cent of the population expected to live in urban areas by 2050.
The size of Kenya’s middle class is growing as evidenced by the growth in its gross national income per capita, which has increased at a CAGR of 2 per cent over the past 10 years.
Kenya’s investment climate is the strongest in the EAC, with FDI flowing in from emerging and developed markets and a high volume of multinational companies with regional and continent-wide headquartered in the country.
POSITIVE INVESTOR SENTIMENTFDI has been on the rise and is stronger than investment in other EAC countries. Given its position as the economic, commercial and logistical hub of East Africa, private equity capital is now flowing into Kenya.
In 2013, Kenya was the top destination for international investors in the Eastern Africa Region after attracting 12 private equity deals valued at over USD 110.5 million; and in 2015, PwC ranked Nairobi as the most attractive African city for FDI.
“Kenya is developing as the favoured business hub, not only for oil and gas exploration in the sub region but also for industrial production and transport. The country is set to develop further as a regional hub for energy, services and manufacturing over the next decade.” – UNCTAD
GLOBAL BRAND PRESENCE
RECENT LANDMARK INVESTMENTS
Kenya’s geographical location makes the country ideal for strategic partnerships aimed at improving regional and global market share.
Kenyan infrastructure, including the Ports of Mombasa and the KE-UG railway, is the gateway to the vibrant East and Central Africa region.
Jomo Kenyatta International Airport functions as an effective air hub between Africa, Europe and Asia.
Member Countries: 5 Population: 143.5 million Total GDP: $110.3 billion Source: EAC Facts & Figures Report (2014)
Kenya’s membership of regional economic blocs, coupled with its strategic geographic position, make the country the gateway to the huge EAC and COMESA regional markets and a beneficiary of several preferential trade arrangements.
Member Countries: 20 Population: 469 million Total GDP: USD 636 billion Source: COMESA (2013)
PREFERENCIAL TRADE TREATMENT
Kenya is a member of several trade arrangements and beneficiary of trade promotion schemes that include the Africa Growth and Opportunity Act (AGOA), World Trade Organisation and EAC-EU Trade Agreement.
There will soon be Tripartite Free Trade Area (FTA) cooperation, a regional bloc of the EAC, COMESA & SADC nations – creating a potential market of over 600 million.
Empowered by a new constitution and administration, the national and county Governments are approaching the private sector as a central partner in the development and growth of the Kenyan economy.
A New Government
The new Jubilee Administration regards the private sector as a key centre of economic and social development. It has signaled this shift in the Government’s orientation through the divestment of its majority shareholding in state commercial companies through the Nairobi Securities Exchange.
Business environment reforms
Kenya is making efforts to lower the cost of doing business by conducting extensive business regulatory reforms intended to substantially reduce the number of licensing requirements and to make the licensing regimes more transparent and focused on legitimate regulatory purposes.
Open market access system
Kenya has fully liberalised its economy and removed all obstacles that previously hampered the free flow of trade and private investment, such as exchange controls, import and export licensing, as well as restrictions on remittances of profits and dividends.
Devolution into County Governments
Empowered by the new constitution, devolution offers an opportunity for investment through localised innovation and through collaboration, by building commercial ecosystems that expand employment opportunities and empower local communities.
Kenya’s infrastructure landscape is also undergoing significant transformation as evidenced by commitment of over USD 20 billion towards infrastructure development through public-private partnerships.
Increasing investment in infrastructure under PPP arrangements
USD 14.5 billion Konza Technology City “Silicon City” IT hub to be built on 5000 acres of land in Machakos County.
USD 5.5 billion Lamu Port Southern Sudan – Ethiopia Transport Corridor Construction of Lamu Port headquarters is in progress.
USD 3.6 billion Standard Gauge Railway links Kenya’s Indian Ocean port city of Mombasa to the capital Nairobi
USD 654 million Jomo Kenyatta International Airport expansion comprises of a 178,000m2 facility due for completion in 2017, complemented by Nairobi Commuter Rail Service linking the city centre to the airport.
USD 366 million The Port of Mombasa harbour channel was deepened by 15 metres and widened to 500 metres to accommodate larger vessels.
USD 360 millionConstruction of the eight-lane controlled-access 50km Nairobi– Thika superhighway was completed in 2012. It has led to the emergence of new businesses, especially in retail and real estate including the creation of three major malls.
Kenya is ideally positioned to unleash Africa’s power generation capacity through its focus on green energy and cost effective sources of energy, set to contribute to a 5000MW increase in the national power grid.
POWER & ENERGY STRATEGY
Increasing share of power generated from green and more cost effective sources, with a target to increase electricity generation capacity by 5,000MW from the current 1,644MW to 6,700 MW in 40 months.
Key Power Project and Recent Resource Discoveries
WIND POWER PROJECT
300 MW Lake Turkana Wind Power Project valued at USD 823 million.
Two new water sources at Turkana Basin and Lotikipi Basin holding 250 billion m3 of water, sufficient to supply Kenya for 70 years.
Discovery of reserves by Tullow oil are estimated to extract as much as one billion barrels.
GEOTHERMAL POWER PROJECT
3,000 MW Geothermal Power Project in Baringo valued at USD 135 million.
COAL POWER PLANT
900 -1,000MW Coal Power Plant in Lamu.
NATURAL GAS PLANT
700-800 MW Natural Gas Fired Plant near Mombasa through a PPP.
Lamu Port (LAPSSET- Lamu Port Southern Sudan Ethiopia Transport Corridor Project)
The project will see the construction of three additional berths and a draft of 18 metres to accommodate larger ships equivalent to 100,000 tons. The first three berths are under construction through the Government funding. The port will be linked to Ethiopia and South Sudan through a road network and a standard gauge railway line via Garissa, Isiolo, Maralal, Lodwar and Lokichogio.
Nairobi Commuter Rail
This project seeks a partner to run the commuter service of the Nairobi Commuter Rail and this will include provision of rolling stock. The Government has already invested in the restoration of the rails. The project will provide expanded, safe, affordable and efficient rail commuter services in Nairobi with the additional benefit of decongesting the capital city’s roads.
This initiative will redevelop existing rail stations into mini cities, which include business parks for light manufacturing, hotels, shopping arcades, restaurants and parking garages.
Thika Toll Road
The highway serves numerous large commercial and industrial enterprises and rapidly growing real estate zones. The 52 km long high capacity expressway is part of the International Trunk Road linking Kenya to Southern Africa through Tanzania and Northern Africa through Ethiopia. It connects high potential industrial and commercial areas in central parts of Kenya to the regional highway backbone (Northern Corridor), Kenya’s International Airport, and three (3) major city arterial roads. The highway will enable smooth dispersal of traffic within the greater Nairobi metropolitan area.
Mombasa 2nd Container Terminal
A new container terminal at the port of Mombasa – on an area of 100 hectares at the western side of the existing Kipevu Oil Terminal – is planned to create an additional capacity of 1.2 million TEU.
Multi-story Terminal at Likoni
Development of a multi-story terminal on 1.6 hectares in Mombasa to provide a modern ferry terminal, parking, bus terminal as well as a variety of commercial services to maximize revenue potential of the site.
|PPP Structure for food courts at JKIA||Kenya Airports Authority|
|O&M of JKIA Terminal 2(Greenfield Terminal)||Kenya Airports Authority|
|Kisumu Lake Port||Kenya Ports Authority|
|Integrated Marine Transport System(IMTS)||Kenya Ferry Services Limited|
|O&M of Nairobi Southern Bypass||Kenya National Highways Authority|
|2nd Nyali Bridge||Kenya National Highways Authority|
|O&M of Nairobi-Thika Road||Kenya National Highways Authority|
|Dualing of Nairobi-Nakuru Road||Kenya National Highways Authority|
|Dualing of Nairobi-Mombasa Highway||Kenya National Highways Authority|
|Conversion of berths 11-14 into container terminals.||Kenya Ports Authority|
Olkaria I United 6 (70MW)
The Olkaria I Unit 6 geothermal power project is an extension to the recently completed Olkaria I Unit 4&5 under the GoK’s 5000+Strategy of provision of affordable power through renewable energy sources. Opportunities exist for EPC Contractor for:
Olkaria V (140MW)
The development of project will increase geothermal generation by development of a new 140MW power plant. This will provide the following opportunities to EPC Contractors.
Meru Wind (400MW)
The proposed project will be undertaken in three phases of 50MW, 150MW and 250MW. The project provides opportunities for EPC Contractor to design, supply, install, test and commission Phase I of the Meru Wind Project. In addition, an equity partner is required for the subsequent phases
Olkaria VI (140MW)
Olkaria Field is endowed with geothermal energy for the provision of steam and power. KenGen has been exploring the field and currently, the exploited capacity amounts to 487MW of power. The project presents opportunities in terms of advisory services, consultancies, financing (loan or equity), EPC contract, O&M management contract among others in line with the preferred model that will be selected for implementation.
635MW Geothermal Olkaria Pipeline
KenGen has been granted the license by the Government of Kenya to develop the Olkaria field, which has an estimated resource potential of about 1200MW, of which 204.8MW is already developed, and an additional 280MW is in the construction stages.
The project will create increased national power generation capacity significantly and the consequent wider economic benefits.
The development will also aim to bring local employment benefits and skills development directly through the provision of construction and operational jobs, and indirectly through the attraction of investment into the area.
KenGen Industrial Park
This project will see the development a world-class mixed use industrial park including various clusters of businesses, manufacturing and services in Olkaria. The project will cover 1200 acres and will benefit from the proximity to the geothermal power stations and the Nairobi-Kampala railway
Mombasa Petroleum Trading Hub
The Trading Hub will be a modern petroleum terminal comprising of two offshore petroleum jetties with one dedicated to loading/offloading of crude oil and black fuels. The other dedicated to refined products. A modern greenfield petroleum tank farm with a design capacity of 800,000MT is to be developed in phases from an initial minimum capacity of 300,000 MT. The project aims at improving supply security and reducing the cost of supply.
Liquefied Natural Gas (LNG) Storage and Regasification Facility with Associated Power Generation
The project comprises of two components. One component involves the establishment of a jetty, storage and the regasification facilities. The other component will be the development of a power generation plant through a partnership between KenGen and the private sector.
Arror Multipurpose Dam
The development is proposed to generate 60MWof hydropower using waters of Arror River, as well as irrigating 2500 hectares for crop production whilst conserving, rehabilitating and protecting the environment along the Arror.
Magwagwa Multipurpose Dam
Magwagwa Multipurpose Dam Project comprises the construction of a 95m high and 450m long concrete faced rock fill dam with a design total output of 120MW and an annual energy production of 510GWh/y. It also comprises a reservoir with a maximum capacity of 445*10,000,000 cubic meters expected to supply water to 19 service centres starting with Magwagwa town, whilst also providing water for irrigation and fisheries.
Gitwiki Hydro Falls
The development is proposed to generate 1.5 MW of hydropower on Kathita River. The payback period of the development is seven years. The annual revenue projection is USD 657,000.
Kamachege Hydro Falls
The development is proposed to generate 2.5MW of hydropower using waters of Kithinu River. The annual revenue projection is USD 1.095 million.
Nturingwi Solar PV
The development is proposed to generate 80MW of solar power. The flat topography, its average global horizontal irradiation of 6.2kWh/m2 per day and 2263.3kWh/m2 per annum make it ideal for a solar PV project.
Kandebene Wind Project
The development is proposed to generate 50MW as the area falls under wind class 4-5. The annual revenue projection is USD 14.45 million, with an estimated payback period of seven years.
|Kiambere-Solar Energy Development||Tana & Athi Rivers Water Development Authority|
|2x100MW Menengai Phase I-I||Geothermal Development Corporation (GDC)|
|800 MW Menengai Phase 2||Geothermal Development Corporation (GDC)|
|Geothermal Development Corporation (GDC)|
|Offshore Jetty||National Oil Corporation of Kenya|
|300MW Geothermal Plant||Geothermal Development Corporation (GDC)|
Tana Delta Irrigation Sugar ProjectPromoter: Tana & Athi Water Rivers Development Authority
Development of 20,000 hectares of sugar fields with the construction of a 10,000 hectares sugar processing plant, installation of a 34 MW cogeneration power plant and installation of an ethanol plant with capacity of 75,000 litres per day.
Fish Port Development Project
The project is designed to develop a modern and equipped fish port along the Kenyan coastline.UPCOMING PROJECTS
|Tana Delta Irrigation Sugar project||Tana &Athi Water Rivers Development Authority|
|Meat Processing Plant||Kerio Valley Development Authority|
|Fruit Processing Plant||Kerio Valley Development Authority|
|Modern State of the Art Abattoir||Mandera County Government|
|Munyu Mutipurpose and Greater Kibwezi irrigation||Tana &Athi Water Rivers Development Authority|
|Tana Delta Irrigation Rice Project||Tana &Athi Water Rivers Development Authority|
|Fish Port Development Project||Coast Development Authority|
|Civil Servants Housing Project||Ministry of Land, Housing and Urban Development|
The project will include the development of a five-star hotel (400 rooms), two-three star hotels (300 rooms), conference facilities, an office park and car park for 2000 vehicles.
Mombasa International Convention Center
The concept entails the development of a multi-purpose Convention Centre, with a contemporary design to ensure large scale meetings, events and conferences can be facilitated in Kenya.
The site is located on a rehabilitated quarry within Haller Park located South of the Bamburi Cement plant along the Mombasa-Malindi Highway, on the Kenyan Coast.
Vision 2030 identifies conferences and business tourism as important factors in fulfilling the growth strategy. This project will seek to enhance the country’s capacity to host major events through upgrading hotel facilities and improving transport infrastructure.
Expansion and Development of Kenya International Convention Centre
The project entails the expansion and development of a 300-bed hotel and exhibition centre in the middle of Nairobi’s Central Business District
First Class Hotel at Bomas of Kenya
Development of a five-star hotel with authentic African architecture and features . Traditional houses like those of the Maasai, Kalenjin, Mijikenda and Luo can be used, and are easily adaptable to hotel-type accommodation.UPCOMING PROJECTS
|Development of Marina at Shimoni||Tourism Finance Corporation|
|Masinga Dam Ecotourism Complex||Tana & Athi Water Rivers Development Authority|
Mwache Multipurpose Dam Development Projects
Construction of 83.7m high dam with capacity to produce 47.45 million m3 of water per annum for domestic use - serving 1,536,000 people and 20,000 livestock.
This will have an annual capacity to produce 51.79 million m3 of water for irrigation to serve an irrigated area of 8,532 hectares.
Development of a multipurpose project to contribute to increases in water production for domestic use, improve on farming produce through irrigation schemes, domestic and livestock use and fisheries and forestry consumption.
Dembwa Multipurpose Dam Development Project
Development of a 100m high dam with a reservoir capacity of 60 million cubic meters set to generate 3MW of hydro power, irrigate 3,000 hectares, serve 200,000 people and 20,000 livestock and conserve 300sq km of catchment land.
Sabaki River Basin Integreated Development
This integrated project is set on 10,000 hectares and will involve crop farming, livestock production, aquaculture, environment conservation, water supply and sanitation and development of support infrastructure.
|Nairobi Bulk Water Supply||Athi Water Services Board|
|Nandi Forest Multipurpose Dam||Lake Basin Development Authority|
|Webuye Multipurpose Dam Development||Lake Basin Development Authority|
|Nairobi Solid Waste Management||Nairobi County Government|
|Mombasa Solid Waste Management||Mombasa County Government|
|Nakuru Solid Waste Management||Nakuru County Government|
300-Bed Hospital at KNH-Private Wing
Development of the first full health PPP project in Kenya to provide local access to State-of-the-Art specialty care thereby reducing the need to travel. A build-operate-transfer PPP where the private party finances, constructs, operates and maintains (O&M) the envisaged seven-story to house 300-bed hospital building.
|Equipment Lease and Infrastructure Improvement||Ministry of Health|
|ICT Services at Kenyatta National Hospital||Ministry of Health|
|Oxygen Plant||Ministry of Health|
Moi University Student Hostels
Construction of seven student hostels and blocks to accommodate 9,880 students on a Build-Operate-Transfer (BOT) PPP model.
|Embu University College Student Accommodation Hostels||Embu University|
|Maseno University Student Accommodation Hostels||Maseno University|
|Egerton University Student Accommodation Hostels||Egerton University|
|SEKU Student Accommodation Hostels||SEKU|
|Kenya School of Government-Embu Accommodation Hostels||Kenya School of Government-Embu|
Shimoni Cement Productions
The cement production project is planned to be located at Shimoni, Kwale District, Coast Province nearby a limestone mine and spread limestone deposit. Produced cement will be for domestic use and export.
|Flat Glass Production||Coast Development Authority|
|Dongo Kundu Special Economic Zones||Ministry of Industrialization Cooperatives and Enterprise Development|
Expansion of Jamii Bora Bank
The bank focuses on small and medium entrepreneurs seeking to scale up to become future corporates. The bank seeks either equity or long-term debt to expand and match the growing demand of these clients.
|Nairobi International Financial Centre||The Treasury|
Kenya’s private sector is substantial and includes a number of foreign investors.
Key players in voicing private sector concerns include: Kenya Private Sector Alliance (KEPSA), Federation of Kenya Employers (FKE) and the Kenya Association of Manufacturers (KAM).
Kenya prides itself on its large, highly educated and skilled work force – with 55 per cent of the population aged 15-64.
Foreign participation in NSE: 54.1 per cent of total equity turnover (January-June 2014)
A number of organisations and Government agencies have publications and resources of interest to investors, most of which are available online. KenInvest has an archive of reports based on original research undertaken as part of their programmes or publications from economic development agencies.
FURTHER FACTS ON KENYA
CELEBRITIES AND KENYA
NEW OPENINGS IN KENYA
July 2015: As the leading economy in East and Central Africa, Kenya’s strategic location and its developed infrastructure makes it a natural choice for investors and an Africa hub for many international firms.
Leading Kenyan businessmen describe Kenya’s business environment, why it remains attractive to investors and some of the current opportunities that exist for businesses looking to enter the market.
Alnoor Kanji, Director of EnglishPoint Marina in Mombasa, discusses the development of East Africa’s first serviced marina with 89 berths targeting the luxury boating world.
Dr. Moses Ikiara, Managing Director, KenInvest, speaks during an interview at the organisation's head office in Nairobi. He states that recent visits by former US president Bill Clinton & Secretary of State John Kerry send out a strong statement on US confidence in Kenya, demonstrating the strengthening ties between the two countries.
Pope Francis will visit Kenya from 25 – 27 November in his first ever trip to Africa. Nairobi will be his first stop on a three-state visit of the continent to include Uganda and the Central African Republic.
The Catholic community in Kenya accounts for an estimated 33 percent of the population. While in Nairobi, Pope Francis will hold a Mass on the campus of the University of Nairobi which is expected to be attended by 1.4 million people from across the country.
The Pope will also meet other religious leaders to discuss inclusivity and how people of all denominations can co-exist. Key discussions will include matters around climate change, strengthening family ties, and inter-ethnic tolerance.
It has been 20 years since Kenya hosted a pontiff of the Roman Catholic Church which was marked by the visit of Pope John Paul II in 1995. The nation is prepared to welcome Pope Francis with blessings and joy.
For further information, and full details Pope Francis’ itinerary, please visit