US firms ink Sh10bn deals with Kenyan Companies
Kenya has signed multi-billion shilling partnership agreements with the US government and companies – the majority of them targeting President Uhuru Kenyatta’s growth pillars commonly known as the ‘Big Four’.
About 12 deals worth more than $100 million (Sh10 billion) were signed on the second day of the three-day official visit by 60 US business executives from the US Presidential Advisory Council on Doing Business in Africa.
Most of the deals were negotiated during an economic summit that the American Chamber of Commerce held in Nairobi and diplomats said they are meant to show Nairobi’s high ranking in President Donald Trump’s economic agenda for Africa.
The US mission, led by Under-Secretary for Commerce Gilbert Kaplan, has been scouting for investment opportunities in Kenya with a key focus on priority sectors for Mr Kenyatta’s last term in office – ending 2022.
Six of the 12 agreements were signed during the Kenya-US summit at Nairobi’s United Nations Complex and the remainder left for a later date, Trade principal secretary Chris Kiptoo said.
The Ministry of Health signed a $20 million (Sh2 billion) agreement with Medtronic that will see a US private firm set up medical dialysis centres in Kenya, while the Ministry of Energy reached an agreement with USAid Power Africa to support the supply of electricity to every Kenyan by 2022 through undisclosed grants.
The USAid grants will be channelled through the Kenya Electricity Transmission Company (Ketraco), Kenya Power and the Energy Regulatory Commission.
Bottom-tier lender Victoria Commercial Bank also reached an agreement for a $10 million (Sh1 billion) credit line, guaranteed by US government-owned OPIC, for on-lending to the SMEs.
Also signed was a $1.3 million (Sh130 million) deal between US energy company Tesla and Mettle OfGen for a 1,260 kilowatt kWh battery system to be installed at the Serena Safari Lodge in Amboseli National Park – the largest off-grid solar and battery system in East Africa.
Kenya Tea Development Agency (KTDA), which manages farms for small-scale tea farmers, also signed a $772,615 grant with US Trade & Development Agency (USTDA) for a feasibility study on a solar and battery storage project.
Mr Kenyatta, who witnessed the signing of the deals, pledged to create a transparent and accountable business operating environment for investors.
The President said Kenya was working to improve trade ties with her peers in the East African Community – to ensure that investors in the Big Four sectors have access to neighbouring countries such Tanzania, Uganda and Rwanda.
“Given our long and well-established relationship, we can do more together. I invite the US Companies to walk with us on the Big 4 journey,” he said.
The head of the US delegation said the US investors were keen on East Africa’s roads, energy and financial services sectors – with Nairobi as the hub.
“Kenya is first on the list of our priority countries in Africa,”Mr Kaplan said.
Trade between Kenya and the US stood at Sh104 billion last year, making US the Seventh largest trading partner.
Mr Kenyatta has allocated a big chunk of public resources to the Big Four Plan, which covers food & nutrition, manufacturing and affordable universal healthcare.
The plan, which requires heavy private sector investment, aims at ensuring access to medical services by all Kenyans and creating at least 800,000 new jobs for the youth in the manufacturing sector.
The plan is also targeted at enhancing food production and construction of at least 500,000 affordable housing units in major urban centres such as Nairobi, Mombasa, Kisumu, Nakuru and Eldoret.
Source: African Strategic-Ventures (ASV) & Business Daily Africa.