The Co-operative Bank has won a major tender that will see it supply 412 trucks to the Kenya Police. According to regulatory filings, Co-op Bank will carry out the leasing project that is estimated to be worth Sh. 2.2 billion in conjunction with South African logistics firm Super Group.
The deal will entail three leasing transactions towards financing the National Police Service (NPS) fleet through two leasing companies.
In the deal, Co-op Bank will come in as the financier, with leasing specialists Rentco and Fleet East Africa arranging the leasing. Rentco and Fleet East Africa which is Super Group’s regional arm. They will collaborate with motor vehicle dealers CMC Motors and Isuzu East Africa. Police sources confirmed the deal will be finalised soon.
Last year, Co-op Bank won a tender to supply 40 trucks to the Kenya Police, marking its entry into the lucrative vehicle leasing market. The Co-op-Super Group joint venture won the Sh.404 million leasing deal in the first half of 2017. Isuzu East Africa has already supplied the trucks. The Johannesburg Stock Exchange-listed Super Group on Monday disclosed it had “secured its first government full maintenance lease contract in Kenya” while releasing its full-year financials for the period ending June 2017.
“Significant new tenders are currently being submitted with regard to further opportunities in Kenya being pursued, which should bode well for this business going forward,” Super Group said in regulatory filings.
Co-op Bank said the leasing unit will leverage on its client base and ownership involving Saccos to offer car lease deals to co-operatives such as matatus and farmers. “We are exploring further opportunities,” Co-op Bank group CEO Gideon Muriuki.
President Uhuru Kenyatta’s move to turn to vehicle leasing to boost the capacity of the police service and other agencies has come as a boon for leasing firms, financiers and auto dealers. “This is a big milestone in ensuring police mobility and safety in their duties,” President Kenyatta said in Nairobi last year. Vehicle leasing is fast gaining currency in Kenya with investors who opt for the model spared the headache of raising upfront costs.