Local firms explore fortunes in RE & manufacturing in Africa
Some Sri Lankan companies not in the renewable energy space are making inroads into Africa to set up clean energy projects while certain others are eyeing manufacturing facilities, industry officials said.
Sri Lanka already has a number of strong engineering and renewable energy companies in clean energy especially in West Africa. Officials point out that the new companies venturing into Africa are not typically in the clean energy space but they are trying to get into it. They also added that some companies are actively looking at countries like Togo and Benin in Africa to set up factories for manufacturing items that are for tax-free exports to the US, which some senior bankers confirmed to the Business Times on Thursday. Industry officials said that these are strategic decisions to ward off the uncertainty in the country that businesses are currently facing.
A banker said that on Thursday his bank had got at least two proposals for renewable energy projects in Africa by companies that are not in the business.
Last year JAT Holdings PLC, a wood coating firm in Sri Lanka, Bangladesh, and the Maldives, made its official entry into the African market by establishing a new entity called ‘JAT Paints Africa Ltd’ in Kenya through a joint venture with Mayleen Corp, a well-established diversified business house based in Kenya. China is financing a three-year US$ 2 million programme involving Ethiopia and Sri Lanka to promote renewable solutions Resident Representative of UNDP for Ethiopia Turhan Saleh has been quoted as saying in the media in Addis Ababa, the capital city. “The recent stalemate in debt restructuring discussions with the bondholders speeds up these decisions of companies,” a businessman, with plans to go to Africa, said.
Industrialists noted that while the debt restructuring discussions will not have a direct impact now, the wait which is a nearly 2-year default for the country, will not have an upside on the country rating which again will not be good for business confidence. Taking business into the African continent in renewable energy projects was a no-brainer, an industrialist said.
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