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Boost for Naivasha as it gets new electric car assembly plant
From right (in blue tie) Investment Promotion PS Abubakar Hassan and Nakuru Deputy Governor David Kones (in red tie) during the groundbreaking ceremony for TAD Motors' Electric Vehicles assembly plant at the Naivasha SEZ.
The drive to operationalise the Naivasha Special Economic Zone (SEZ) in Nakuru's Maai Mahiu area and transform it into a major economic hub in Kenya and East Africa has received a significant boost with the opening of an electric vehicle assembly plant.
TAD Motors Electric Vehicle Assembly inaugurated its plant at the special economic zone on Monday, becoming the second company to establish a base in the area after Japanese car auction company Jumbo AAA Holdings Ltd, which is already operational.
According to Principal Secretary of the State Department for Investment Promotion Abubakar Hassan, the Sh1.5 billion ($10 million) project is a major milestone in advancing the Naivasha Economic Zone.
"The plant will accelerate the adoption of affordable electric cars in the country, while helping to mitigate the effects of climate change through reduced emissions," said Mr Abubakar.
TAD Motors CEO Tadesse Tessema stated that the company will assemble affordable electric cars for domestic use and export to neighbouring countries, creating over 1,500 local jobs. Kenya’s annual demand for cars is around 120,000, with only 10,000 produced locally. Currently, there are more than 1.6 million electric cars and 1.2 million bicycles in the country.
TAD Motors, which already has a presence in Ethiopia, plans to produce 3,000 vehicles initially, with a medium-term goal of increasing production to 5,000 units. The CEO revealed that the plant will source 70 percent of its parts from local manufacturers, promote the country’s climate change agenda, and help owners save up to 80 percent on fuel costs.
More investors lined up
The new develipment comes as 20 other investors are lined up to establish a presence at the Naivasha economic zone, injecting more than Sh100 billion into the area, according to Mr Abubakar.
"The Special Economic Zone Authority (SEZA) has already allocated land to 11 investors, with eight more pending approval. The government has introduced attractive incentives, including relaxed taxes and lower power tariffs, to accelerate economic growth and development, creating jobs, wealth, and reducing the country’s high import bill," PS Abubakar revealed.
Additionally, the government has allocated an extra 5,000 acres of land to the already earmarked 1,000 acres to accommodate more investors.
Three months ago, President Dr. William Ruto presided over the launch of Jumbo AAA Holdings Ltd, the first investor at the Special Economic Zone, specializing in pre-owned vehicles from Japan.
Kenya has also signed a memorandum of understanding with the UAE's G42 and Microsoft to develop the first-ever multi-billion data center powered by geothermal energy from Olkaria. The agreement between Kenya’s EcoCloud and UAE’s G42 will lead to the construction of a 1GW mega data center in the economic zone.
Other investors expected to set up at the Maai Mahiu-based industrial park include a Japanese company investing Sh13 billion in steam energy production from Olkaria and a Turkish Special Economic Zone (SEZ) Limited, investing USD 760 million (Sh91 billion).
Companies that have already received licences to operate at the Naivasha zone include Accurate Steel Mill Ltd, JAFRO SEZ, Africa Global Logistics Ltd, Ceylon Energy Ltd, and now TAD Motors SEZ Ltd.
The new developments have heightened the region's prospects, with investors, locals, and leaders optimistic that the projects will spur economic growth.
Governor Susan Kihika has described the Naivasha SEZ as a game-changer that will turn Nakuru into a major industrial hub in Kenya and East Africa.
"The Naivasha Special Economic Zone will be a game changer in the region. We encourage local investors including Small Medium Enterprises (SMEs)to take advantage of this opportunity and apply for space at the Special Economic Zone. The businesses at the Naivasha Special Economic Zone will enjoy cheaper geothermal power to run their industries and pay favourable taxes," she said.
‘Sh2 billion daily bids’
Special Economic Zone Authority has signed lease agreements with other investors and issued letters of offer to establish industries at the zone.
According to SEZA CEO DrKenneth Chelule, the authority has been reviewing bids from investors of Sh2 billion daily, thanks to attractive incentives, especially lower power tariffs.
“We commend the president for allocating an additional 5,000 acres of land, which will help accommodate incoming investors in heavy industries, cooling facilities, warehousing, logistics, and hospitality,” said Dr Chelule.
The Authority has noted that investors are planning investments in sectors such as iron and steel, textiles, logistics, apparel, leather, paper products, bottling, cold storage, and industrial warehousing.
The government introduced incentives such as VAT exemptions on goods and taxable services. Investors will also benefit from reduced corporate tax rates of 10 percent for the first 10 years, 15 percent for the next 10 years, and 30 percent thereafter. Additionally, cheaper power tariffs at Sh5 per unit are expected to significantly lower manufacturing costs.
The Naivasha SEZ, established on a 6,000-acre site, is part of the government’s industrialisation agenda. To support the development, the National and County governments have invested billions in infrastructure, including a water project and a multi-million Level Four Hospital funded by Nakuru County.
In 2020, former President Uhuru Kenyatta issued a title deed for 50 acres within the Naivasha SEZ for local investors to establish businesses next to the Naivasha Industrial Park.
Nakuru County continues to attract both local and international investors, leveraging its geothermal energy resources and infrastructure to drive economic growth. Companies situated within the Naivasha SEZ will benefit from access to affordable geothermal power, enabling a range of activities from storage to export, along with special tax incentives.
