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Amsons eyes electricity production deal after Bamburi, EAPC buyout
Kenya is targeting to generate an additional 10,000 megawatts of electricity by 2032 to meet the sharply rising demand and cut reliance on imports from Ethiopia and Uganda.
Tanzanian conglomerate, Amsons Group, is seeking to build power generation plants in Kenya after completing the multibillion- shilling purchase of Bamburi Cement and East Africa Portland Cement (EAPC).
The firm, which Tanzanian tycoon Edhah Abdallah Munif owns, says it will enter large-scale power generation in Kenya.
The conglomerate has, however, not disclosed if it will set up a production plant or acquire stakes in existing ones.
Its announcement of the Kenya interest came as Amsons sealed a $600 million (Sh77.4 billion) deal to set up a one-gigawatt or 1,000-megawatt solar power plant in Zambia and says that Kenya is now part of the markets targeted for other power plants.
Like other African countries where blackouts are common due to generation shortfalls and ageing grids, the Kenyan government is racing to keep up with the growing power demand.
“While Amsons is widely known for its cement brands and logistics networks, this investment (setting up a solar power plant in Zambia) signals a major strategic pivot into utility-scale power generation in strategic markets, including Kenya, leveraging its regional presence and financial strength,” the firm said.
Amsons Group has demonstrated a growing appetite for the Kenyan market, with its initial focus being the construction industry.
The conglomerate completed the acquisition of a controlling stake of 68.7 percent in EAPC last month, barely a year after Amsons fully bought Bamburi for Sh23.6 billion.
The firm, through its subsidiary Kalahari Cement, bought the National Social Security Fund’s 27 percent ownership in EAPC last month, adding to the stake of 41.7 percent that it had earlier acquired in the cement firm.
Amsons fully acquired Bamburi Cement for Sh23.5 billion or Sh65 per share. Bamburi was initially majority owned by Swiss multinational Holcim through two investment firms, which had a combined share of 58.6 percent.
Africa Power Generation, a subsidiary of Amsons Group dedicated to the power generation sector, is now scouting for deals in the electricity market.
In Zambia, it seeks to generate an extra 1,000 megawatts of solar power and 300 megawatts of coal power.
Kenya is targeting to generate an additional 10,000 megawatts of electricity by 2032 to meet the sharply rising demand and cut reliance on imports from Ethiopia and Uganda.
Peak power demand jumped by 637 megawatts between 2018 and this year but this has not been matched by an increase in generation, largely due to a freeze on new power deals.
The freeze, imposed in 2018, was lifted by Parliament last month, setting the stage for the entry of new investors such as Amsons Group.
Kenya Power is currently in talks with various power producers with a combined generation capacity of 1,112 megawatts. The talks are at various stages, with the utility keen to expedite the onboarding of new plants.
Solar and geothermal sources have been singled out for their huge untapped potential, making them lucrative for investors keen to enter Kenya’s electricity generation space.
Besides cement, Amsons has interests in wheat milling, cooking gas, petroleum, transport, real estate and smart grid technology.
