Energy-Manufacturing Nexus Takes Centre Stage at Industrialization Forum

Industry leaders, policymakers, development partners and private sector representatives have called for stronger alignment between Kenya's energy and manufacturing sectors, arguing that affordable, reliable and predictable energy was critical to accelerating industrial growth and competitiveness.
Speaking during the Kenya National Industrialization Partners Convening in Nairobi, Industrialization Secretary Prof. Erastus Gatebe emphasized the need for industrialization policies that are supported by resilient implementation frameworks. Participants noted that policy certainty and long-term planning are essential for attracting investments into manufacturing and energy infrastructure.

Officials from the energy sector, led by Director George Ngayu, highlighted the importance of competitive electricity pricing, noting that investments in variable renewable energy, transmission infrastructure and regional interconnections require clear cost-reflective tariff structures. 
“There is need for stronger coordination between the manufacturing and energy sectors. We are proposing the development of Special Economic Zones (SEZs) near energy sources to reduce infrastructure costs and improve industrial productivity,” added Ngayu.
The forum further underscored the need for energy efficiency measures, with participants forging for an alignment of the Least Cost Power Development Plan (LCPDP) with Kenya's industrialization Policy ambitions to ensure energy planning responded effectively to current and future industrial demand.
The discussions also focused on the financial implications of long-term power purchase agreements (PPAs), with stakeholders in the financial sector arguing that existing commitments continue to affect electricity costs and market liberalization efforts. 
“We need to explore innovative financing mechanisms, including bond instruments and budget-neutral models, to lower energy costs while maintaining investor confidence in the power sector,” proposed Director of Industries Stanley Koske, who is spearheading a team to review the National Industrialization Policy alongside Global Energy Alliance for People and Planet, GEAPP.
The growing role of e-mobility in industrial development featured prominently during the forum. BasiGo Chief Executive Officer Jit Bhattacharya noted that supportive policies had enabled the company to grow from manufacturing two electric buses to more than 150 annually.

“Incentives for electric vehicles, local assembly and SEZ investments could stimulate domestic manufacturing, create jobs, reduce imports and position Kenya as a regional hub for clean industrial development and exports within the East African Community,” noted Bhattacharya.
As Kenya gears towards fully electric automobiles and revamped manufacturing sector, energy costs remain a factor to consider, with more efforts shifting towards reducing the costs and sustaining the supply.