Kenyan firms have continued to set their eyes on the landlocked Ethiopian market as the country continues to liberalize it's markets as part of it's economic development agenda.
Firms such as Kengen, Equity, Jubilee Insurance among others are setting their eyes and commencing projects in the northern country's market in a bid to support the agenda.
As part of the agenda, Ethiopia is working on the Homegrown Economic Reform programme which accommodates both the opportunities of the free market and the role of the state to address the country’s economic challenges.
The programme envisages boosting the private sector’s contribution to the overall economy by opening up major public enterprises starting with the telecommunication sector.
To support Ethiopia's economic reform agenda, KenGen has commenced drilling the first geothermal well for Ethiopia Electric Power (EEP) company setting in motion Phase II of Sh7.6 billion contract.
KenGen Managing Director and CEO, Rebecca Miano said KenGen would within the next three weeks mobilize specialized drilling services crew including aerated drillers, directional drillers, and reservoir engineers to ensure the project was a success.
EEP's former CEO, Abraham Belay revealed that Ethiopia’s quest for geothermal energy spans over four decades as the country had tried to venture into geothermal development as far back as 1981.
Belay noted that with KenGen’s entry into the country, Ethiopia is now staring at a geothermal generation breakthrough.
This move by KenGen to commence Phase II of the project follows completion of Phase I of the contract by the consortium partners under which two rigs were delivered at Aluto site in Ethiopia.
The First Phase entailed purchase of drilling rigs while Phase II entails provision of drilling services.
Kenya's government also intends to use recently refurbished Nanyuki metre gauge railway to transport cargo to Ethiopia from the Mombasa port as it targets growing industrial activities at the border.
Landlocked Ethiopia has mainly been relying on the Djibouti port for cargo from overseas but this mainly serves the upper part of the country.
The Nanyuki-Moyale route, which enjoys a good road network, will shorten the distance on consignment that are destined to the lower region of Ethiopia.
Equity Group also plans to grow its customer base to 100 million by targeting small businesses and mining sectors in Ethiopia's Sh120 million banking market.
According to the Group CEO James Mwangi, the lender will take anshorter time to replicate Kenya’s success in the Ethiopian market when it opens up financial services to foreign investors.
Regional insurer Jubilee Holdings Ltd (JHL) and Germany’s insurance and asset management firm Allianz have ALSO put entry into the Ethiopian market on the radar after the conclusion of their multi-million dollar share sale deal relating to general insurance business.
The two firms in early May the partnership gives them the synergies to jointly explore new markets, with discussions ongoing for the Ethiopian market.
Safaricom however made an about turn in it's stake in the Ethiopia’s state-owned Ethio Telecom after a consortium it leads won a license to operate in the country.
Safaricom CEO Peter Ndegwa said the desire for a stake in Ethiopia's only telco firm has been overtaken by events and they are now keen on becoming a worthy competitor in the market.
The Kenyan telco had in October 2019 expressed interest in the Ethiopian firm currently in the final stages of partial privatisation as the government opens up its telecommunication sector.