Automaker Kiira banks on investors for its $2 billion city
Tuesday January 10 2023
The Ugandan made Kiira. PHOTO | MORGAN MBABAZI
Uganda’s automaker Kiira Motors Corporation (KMC) is banking on regional and international investors for its ambitious $2 billion automotive city, dedicated to driving local content in its manufacturing value chain.
According to a project summary seen by The EastAfrican, the private investors are expected to raise $1.43 billion or 72 percent of the $1,979,542,111 total investment. For its part, KMC will invest $540 million, half of which will be financed by equity and the other half by debt.
Although the facility will be developed over a 25-year cycle, the initial phase running for eight years to 2030, aims to account for 65 percent of the value of the supply chain by that time.
Read: Uganda's Kiira Motors in race against time
Projections show that the investment is expected to break-even from the ninth year. Players in the project are expected to develop the capacity to supply some of their products to other automotive manufacturers that may set-up elsewhere in Africa.
Auto accessories
KMC is selling the project to the government as a catalyst for economic and social benefits including an enhanced tax and exports base, equipping the local community with skills to work in the industrial sector, increased employment opportunities and attracting infrastructure such as a better road network, electricity lines, and railways among others.
Set on two square-miles at a site 173km north-east of Kampala, the facility will complement the 5,000 buses and trucks-a-year initial facility nearing launch on the outskirts of Jinja.
Dubbed Uganda Eco-Automotive Industrial and Technology Park, the expansive facility will house an electric-mobility research, skilling and innovation centre, as well as a multiplicity of automotive component manufacturers, a larger motor vehicle plant for KMC, extensive vehicle proving grounds, and the company’s corporate headquarters.
The partners manufacture automotive accessories including air and fuel filters, brake pads, glass, seats, lithium-ion batteries, bolts and nuts, wiring harnesses, tyres, electronics and bamboo boards, on-site. Part of the land will be dedicated to a Free Economic Zone, a hospital complex, commercial centres, recreation parks, schools, low, medium and high-density housing, a solar farm, logistic centres and park management services.