Companies

KenGen seeks to establish transformer, motors plant

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The Cabinet has ordered a split of Kenya’s electricity transmission system to ensure that a power failure in one part does not affect the whole country. FILE PHOTO | NMG

KenGen is seeking to establish a local manufacturing plant for transformers and motors to diversify its revenues that now come mostly from the sale of electricity to Kenya Power.

The company, which is listed on the Nairobi Securities Exchange (NSE), is one of the main consumers of distribution transformers and power motors alongside the likes of Kenya Power, the Kenya Electricity Transmission Company (Ketraco) and the Rural Electrification and Renewable Energy Corporation (Rerec).

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KenGen has now signalled plans to set up a plant to manufacture these components locally, both for its own use and for sale. The power producer has issued an Expression of Interest (EoI) for the study of the feasibility of the business. 

To bring the proposed venture to fruition, they are eyeing partnerships with manufacturers of distribution transformers and power motors to support its new line of business.

"The company is intending to set up a manufacturing plant for distribution transformers and motors and is inviting Expressions of Interest from eligible consultancy firms to offer feasibility study on factory start-up for transformers and motors, from technology transfer, design layout, procurement and supply of equipment, raw material, pilot batch, and all the necessary approvals up to final production, and marketing, capacity building and partnership with other transformer and motor manufacturers," said KenGen in a notice.

"KenGen, being the leading power producer in the country as well as one of the main consumers of transformers and motors, supports local manufacturing in order to transform Kenya into a country with a competitive industrial base that guarantees a strong economic foundation and productive jobs."

Transformers are a big business in the country and Kenya Power, the largest consumer of the equipment in Kenya, has been struggling to buy enough distribution transformers to meet demand even as it continues to rapidly expand its network.

The utility buys thousands of new transformers every year and also has repair sheds for faulty transformers in major towns to save on costs. Tenders for the supply of transformers are fiercely fought by both local and global manufacturers, with the contracts often running into billions of shillings.

By 2017, Kenya Power had more than 55,000 transformers installed across the country, and the number has only gone up owing to the utility's aggressive grid expansion drive.

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The utility recently revealed that a transformer costs about Sh500,000, and because the equipment is imported, prices are likely to rise further owing to the rapid depreciation of the Kenyan shilling.

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