The Anchor October 2011

The export processing zone authority will put up a Sh 8 billion power plant in Athi river to supply electricity to investors and curb them from the rising cost of energy.

This was disclosed yesterday by the EPZA chief executive Dr Richard Kilonzo who said power was now costing the investors 26percent of their entire production costs which was very high.

‘ We require between 6-8 mega watts at the EPZ but on completion of phase 2, we will need 20 mega watts thus the need for a power plant in the facility’ the chief executive said.

He added that they had considered renewable source of energy including solar and biomass and expect the project to be complete in the next two years.

Dr Kilonzo said they were negotiating with the international finance corporation (IFC) and other lending agencies who have shown interest in financing the project.

He added that EPZA was providing water to the investors but also had to provide electricity which was a major challenge taking into consideration the rising cost of energy in the country.

He was speaking to the press in his office after signing a contract with Metropol credit reference bureau to provide credit and risk management solutions to the EPZA

Dr Kilonzo said debtors owe the authority over Sh 150 million in accumulated fees on land rates and licenses which needed to be cleared for the smooth operation of the authority.

He added that the EPZ’s around the country employ over 40,000 people with 58 percent of it’s operations in the coast region due to the port.

‘ We have 42 zones in Kenya with 75 operational enterprises and more investors are knocking on our doors’ Dr Kilonzo said of the growth of EPZA.

Among incentives enjoyed by EPZ investors is a 10 year corporate tax holiday and 25 percent tax thereafter and not applicable to EPZ commercial licenses.

Investors are also exempted from stamp duty and get 100% investment deduction over 20 years for building and machinery.

They also get perpetual duty and VAT exemption on raw materials,machinery,services and other business imputs except certain fuels and motor vehicles.

By 2009, EPZ exports to regional and international markets stood at Sh 24 billion,local utilization was Sh 11 billion during the same period.