(Nairobi) – Kenya has signed a series of agreements with prominent Japanese companies, including Toyota Tsusho Corporation, which could bring in a total of approximately $620 million (Ksh99 billion) in investments. These agreements, which cover sectors such as green energy and vehicle manufacturing, are expected to create new opportunities for economic growth and job creation.
In Tokyo, President William Ruto announced the successful signing of the Framework Agreement for Collaboration between Kenya and Toyota Tsusho Corporation, following a visit to the Toyota Motomachi Factory. According to President Ruto, the deals include major projects in wind energy, solar energy, geothermal power, and the assembly of electric vehicles in Kenya. These include the Ksh15 billion (US$94 million) Meru Wind Farm project, the Ksh8 billion (US$50.2 million) Isiolo Solar Energy initiative, and the Ksh800 million (US$5 million) investment in Thika’s Kenya Vehicle Manufacturers (KVM) plant. Additionally, the Ksh75 billion (US$470.22 million) Menengai Geothermal Plant and electric vehicle promotion were highlighted as part of the partnership.
The Meru Wind Farm, with an expected capacity of 400 megawatts, will be situated in Tigania East Sub-County, covering an 18,700-acre area. The Isiolo Solar Energy project, which is aimed at increasing access to clean energy, was initially funded by the World Bank and is designed to benefit over 5,000 households.
A significant aspect of the deal involves Toyota’s interest in revamping KVM, one of Kenya’s local vehicle assembly plants, which has been struggling financially. The Japanese firm signed the deal with the Kenyan government during the G7 Session of Trade Ministers in Osaka in October of the previous year. The agreement includes an initial investment of Ksh800 million (US$5 million) to stabilize the plant, which assembles vehicles from brands like Nissan, Peugeot, and Hyundai. The plant also builds bodies for commercial vehicles from companies such as Isuzu, Mitsubishi, and Tata, among others.
President Ruto highlighted the importance of local vehicle manufacturing, emphasizing that it would reduce Kenya’s reliance on imported used cars while creating much-needed jobs for skilled workers in the country. “The manufacturing project would not only help cut down on used vehicle imports but also provide employment opportunities for our young and skilled workforce,” said Ruto.
He further assured that the Kenyan government is committed to offering sufficient incentives for multinational automotive manufacturers like Toyota Tsusho to establish their plants in Kenya. According to Ruto, the discussions with Toyota on the potential vehicle manufacturing plant in Kenya are making positive progress.
Despite the promising developments, the Kenyan government recognizes that more opportunities remain untapped in the country’s automotive sector. Toyota’s involvement in KVM is seen as a critical step in securing the future of local vehicle assembly in Kenya, ensuring that the plant can continue to operate and meet the growing demand for vehicles in the region.