Agency sets Sh250m minimum capital for Konza city investors

Investors eyeing space at Konza Techno City will be required to raise between Sh250 million and Sh2.6 billion for various projects earmarked for phase one, a document from Konza Technopolis Development Authority (KoTDA) indicates.
The agency says investors will need to prove their

ability to raise the requisite capital and show that they have undertaken

similar projects before.

Investors are also required to focus on technology, engineering and innovation projects, with the demands meant to lock out land speculators.

The expression of interest will close on January 30, 2016 after which evaluation of the bids will be undertaken, setting the stage for investment flows starting next year.

“Eligible investors are required to demonstrate financial and technical capability and show experience in having undertaken similar projects in their fields of expertise,” said John Tanui, KoTDA chief executive.

“We are looking forward to working with the investors to realise the Silicon Savannah dream that will position Kenya as a global centre for innovation and Africa’s technology hub,” he added.

The KoTDA’s investor document, which also outlines the investments from the public sector, will see private investors put up facilities such as schools, office blocks, residential housing and shopping malls.

Phase 1 A of Konza City will see 60 acres of land carved out of the larger 5,000 acres set aside for the development of Konza city.

Winning firms will be given a lease on the piece of land divided in portions of between 0.5 acres and 2.5 acres — depending on the type of investment— where they will build approved structures as per the Konza city master plan.

In the document, the government will in phase one spend Sh4.8 billion on road construction, Sh2.7 billion on electricity services and Sh0.98 billion to put up the Konza pavilion — a building that will house government departments. The government will spend another Sh621 million on building of a data centre.

The preparation for investments on the site comes about two months after KoTDA presented 24 parcels of land to the private sector.

The government also proposed a raft of incentives through Konza Technopolis Development Authority Bill 2014, which stipulates that investors in Konza technopolis be exempted from paying taxes for 10 years if it is passed into law.

The businesses will also pay a lower tax rate of 15 per cent after the 10 years and dividends paid to shareholders will also be exempted from withholding tax — which is five per cent and 10 per cent for locals and foreigners respectively.

Expatriates working in the city will not pay income tax on their pay while foreign firms will be exempted from a rule which demands that they reserve 20 per cent of their shareholding to local investors, according to the Bill.

Source: business daily

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