Post on 13-Jan-2016
Kenya
Opportunities in the Energy Sector
Africa Energy and Renewables
A little about us: Energy services company. Develop renewable energy projects. Act as local Reps. for OEMs Consult with local and international firms on Energy
in Kenya. Involved in Community Development projects.
A few facts
'08 econ growth 7% '09 econ growth 3% Population 38 MM On Grid: 18% Trade Blck: COMESA
Current Electricity Generation Hydro Diesel Geothermal
Misc generation Solar Wind Biomass
The Energy Sector
Current Generation capacity: 1,150 MW Planned Generation in 2018: 3,011 MW Growth Drivers:
Govt. Commitment to connect 1MM new consumers in 5yrs.
Growing economy Growing population Technology adoption including cellphones, TVs,
Computers etc.
Why will the additional capacity come from?
Large Hydro:
60 MW on Mutonga or River Tana. Est. cost $250MM
140 MW at Lower Grand Falls. Est. cost $600MM
Where will the additional Capacity come from
Small Hydro: 3,000 MW across the country.
Initiative to tea factories that often are located in ideal settings.
Feed in tariffs for IPP: $0.06 to $0.12/kWh
Geothermal
7,000 MW potential in the Great Rift Valley Currently 165 MW developed or under
development including Kengen and Ormat. Govt. Forming Geothermal Development Corp.
that will carry the exploration risk and lease out proven steam to IPP.
No published Feed in Tariff. - Negotiate
Coal
Govt. doing feasibility study for a 300 MW Coal Plant. Opportunities
Developing a coal berth at the port of Mombasa. Plant construction and operation Coal exploration – Govt. currently leasing out 8 coal
blocks around the country.
Solar
Average solar insolation btwn 4 and 6kWh per M²
Currently 500,000 homes have solar panels. Govt. using solar panels for remote schools and
clinics No Feed in Tariff on Solar yet “too expensive”.
Open to proposals though....................
Wind
Govt. believes there is 405MW potential
Wind Resource Map available: http://swera.unep.net/
Feed in Tariff : $0.09
N uclear
Govt. seeking an investor for a 500 MW to 1GW Capacity.
Construction time frame: Next 7 years. Arrangement: BOOT ( Build Own Operate
Transfer) Based on a 30yr PPA.
Other Opportunities
Infrastructure: Plans for 400 Km of 132 kV Plans for 450 Km of 400 kV Grid requires 60,000 transformers over the next 5
yrs. - Local Manufacture or import? Annual maintenance of 2,000 transformers. Meters? Smart Meters? Switchgear? Insulators?
etc.
Challenges
Information: Who? Where? How? What Price? Network. Google utility events on the continent and
attend. Linkedin.com USDTA US Embassy in Nairobi Kenyans in Diaspora Common sense AGOA MBITA
Challenges
Currency Risk: Hedge Transact in Dollars
Corruption Say no.
Culture Get a good local partner
Check references, visit the US Embassy in Nairobi.
Challenges
Political Risk Relatively stable. Get Insurance http://www.miga.org/
Cost of doing business Pretty high in Nairobi. Factor it into your models.
Payment Risk - significant Cash LC
Challenges
Legal Protection Get proper legal representation. That being said, structure your transactions with the
assumption that there is no legal recourse. Long legal process Tons of loopholes Disadvantaged from a local network perspective Expensive
Have Fun!
Kenya is a great place to do business: Food Culture Safari Indian Ocean Beaches Kilimanjaro and Mt. Kenya People. Don't sweat the small stuff:
Traffic, congestion etc.
Thanks
Joseph Nganga
jnganga@africarenewables.com
+1 704 804 4684
Developing renewable energy and energy efficiency projects.