Cost of electricity to EPZ factories down by half

The Government has cut the cost of electricity to Exports Processing Zones (EPZ) factories by half, Industrialisation Cabinet Secretary Adan Mohammed has said.

Mr Mohammed said many firms keen to set up factories under the African Growth and Opportunity Act (Agoa) decided to go to other countries because of the high cost of production.

The move to subsidise the cost of energy will cushion the sector from high cost of production and boost competitive in the US market, he said.

Mohammed said the Government is negotiating with a multinational textile and apparel firm keen to invest $400 million (Sh36.4 billion) in the country, in a move aimed at attracting more investments by international firms in the sector. He declined to name the firm or the region it intends to set up base saying it will compromise negotiations.

"The cost of production in the country for the textile and apparel sector is still very high compared to say those EPZ firms in Ethiopia. I know the Ministry of Energy is doing everything possible to reduce the cost of power but we have also given the textile sector a 50 per cent subsidy on electricity," said Mohammed yesterday at the Mombasa Apparel EPZ. The firm is planning to hire more than 5,000 employees.