KPLC’s strict rules will build local industry
Building a strong manufacturing sector is one of the key ways of creating jobs for unemployed youth. A thriving industry will place Kenya in a better position to attract foreign direct investments and world-class expertise, thereby taming capital flight and increase government income from taxes and royalties.
Kenya Power has taken a deliberate step in this direction by prioritising its purchase of equipment and materials from the local market to encourage manufacturers to set up plants in the country.
Under our new procurement guidelines, 80 per cent of all equipment and materials needed for electricity distribution will be sourced locally.
This move is expected to provide an incentive to global manufacturers who have been supplying materials to Kenya Power to relocate their operations to Kenya. We also expect local manufacturers and businesses which have been partnering with some of the international suppliers to set up their operations locally.
This decision is based on a pragmatic approach the company adopted in early 2010, that has since paid off. For instance in 2013, there were about nine wooden and concrete pole plants in Kenya. During this time, we used to import wooden poles from as far as Chile, Brazil, and South Africa among other countries.
Today, there are 54 wooden and concrete pole manufacturing plants, thanks to our decision to stop importing poles and locked the market for local suppliers. This has created thousands of jobs.
Indeed, our shift to use concrete poles in an effort to improve the longevity of the network infrastructure led to the birth of a new industry.
With increased levels of connectivity as we target to connect 70 per cent of the population by 2017 and 100 per cent by 2020, there is a huge momentum for the poles subsector. In fact, last financial year 2015-16, we connected a record 1.25 million households, consuming more than 500,000 poles in the process. And this was just one item.
Second, we have locked the supply of cables and conductors for the local market. Currently, we have five suppliers who provide the cables and conductors we need. Last financial year, we used close to 30,000,000 metres of cables and conductors to connect the 1.25 million households.
This financial year, we intend to spend Sh54 billion to procure goods. About 80 per cent, which is equivalent to Sh43.2 billion of this capital expenditure, will be spent to buy locally made goods.