A Nairobi-based Sri Lankan company has launched a bid for contracts to supply electricity cables to two State-owned power agencies after securing an additional Sh80 million capital injection from a local bank and its Colombo parent shareholder.
Sierra Cables East Africa chief executive Ruwan Fernando said the firm had ramped up production to 24 hours to meet fresh demand from Kenya Power and the Rural Electricity Authority (REA) as well as boost sales and earnings.
“We are banking on the new order from utility companies and independent power producers in Kenya and East Africa to grow the company’s revenue and eventually turn into a profit making position,” Mr Fernando told the Business Daily in an interview.
He said the firm’s parent company and Centum-owned Sidian Bank provided it with Sh30 million, adding that Sierra was in negotiations with the lender to get more financing to beef up operations.
“In the year ended 2018 Sierra Cables PLC gave Sierra Cables EA an additional capital injection of Sh50 million in the form of equity for purposes of purchasing raw materials, majorly aluminum, to facilitate the production process,” Mr Fernando said.
Kenya has a 40 per cent local contracts requirement on low voltage cables.
Sierra, which makes cables for use in transmission of electricity and telecommunications, started operations in Kenya in 2016 after incorporation in 2015.
The firm became fully operational in 2017 after completion of installation of its production machinery.
“We are currently running production on a 24-hour basis for purposes of meeting outstanding orders,” said Mr Fernando.
Kenya Power and REA have been racing to increase the number of household power connection in line with the Jubilee administration’s election pledge.
The government targets universal electricity access by 2020, up from 70 percent in 2017.
Sierra said it secured orders from REA but had been unable to operate at optimum capacity.
“We are currently at 80 per cent towards satisfying the orders that were outstanding as at December 31, and projecting to complete the 20 per cent by end of January 2019,” he said.