NAIROBI – Kenya plans to more than double foreign direct investment (FDI) this fiscal year as it awards tenders to increase power generation and sells state-owned companies.

FDI flows may climb to $1b this financial year from about $400m a year earlier, Industrialisation Secretary Adan Mohamed said on Tuesday.

"We expect private funding for power generation to dramatically increase FDI flows,” he said.

Kenya will target the same amount of investment in the fiscal year starting July 1, he added. Kenya’s FDI flows represented one per cent of gross domestic product in 2011, compared with 4.6 per cent and 5.3 per cent in neighbouring Tanzania and Uganda respectively, according to official data.

Kenya’s energy ministry is in the process of procuring contractors for the development of a 960-megawatt coal-fired electricity plant and a 700-megawatt natural gas-powered facility.

The two projects are part of a plan by the government to increase generation fourfold to 7,200 megawatts at an estimated cost of $15b by 2017.

The government expects to attract about $109m of investment as it sells mainly agriculture-based companies to private investors.

Agencies