Kenya, East Africa's biggest economy, plans to more than double foreign direct investment this fiscal year as it awards tenders to increase power generation and sells state-owned companies.

FDI flows may climb to $1 billion in the year through June from about $400 million a year earlier, Industrialisation Secretary Adan Mohamed said Tuesday in an interview in the capital, Nairobi.

“We expect private funding for power generation to dramatically increase FDI flows,” he said.

Kenya will target the same amount of investment in the fiscal year starting July 1, according to a presentation e-mailed by Mr Mohamed’s office.

Kenya’s FDI flows represented one per cent of gross domestic product in 2011, compared with 4.6 per cent and 5.3 per cent in neighbouring Tanzania and Uganda respectively, the information shows.

READ: Investments in EAC to grow despite spillover risks from conflicts

Kenya’s Energy ministry is in the process of procuring contractors for the development of a 960-megawatt coal-fired electricity plant and a 700-megawatt natural gas-powered facility.

The two projects are part of a plan by the government to increase generation fourfold to 7,200 megawatts at an estimated cost of $15 billion by 2017.

The government expects to attract Sh9.5 billion ($109 million) of investment as it sells mainly agriculture-based companies to private investors, according to the statement.

“We are finalising the process of getting an investor for Pan African Paper Mills,” Mohamed said. “The process of selling sugar factories is already going on.”

The government estimates Pan African Paper Mills will require an investment of Sh1 billion.