Ground breaking for Mombasa port this week.

The Ground Breaking ceremony for the expansion of Mombasa  Port on Thursday November 22nd 2012, we can report.

The ceremony to be officiated 2012,by President Mwai Kibaki  will launch the second of the Port’s two-phase  upgrading project that began last year. The US$ 320 million  project will turn the Mombasa port into a Mega port.

The first phase of the development project included the dredging of the port to a depth of 15 Metres. It also widened the Likoni Channel from 250 Meters to more than 300 meters, while the turning basin was widened to 600 meters. It cost a US$62 million.

The second phase  involves construction of three berths with a straight-line quay of 900 meters, reclamation of 100 hectares of land, second container terminal with a capacity of one million TEUs, construction of a 5KM link road to Mombasa southern by-pass and a Railway line.  At the end of the two-year- US$200 million project, the Mombasa Port will have a capacity of 1.25 Million TEUs. 

The Mombasa port, which is the hub of shipping business in east and central Africa, has come under intense pressure to expand in the recent past due to robust economic growth in the region and also changes in vessel sizes. 

Robust economic growth both in Kenya and among her landlocked neighbours such as Uganda, Rwanda, Burundi and South Sudan generated increased demand for imports and exports through the port.
This growth in large vessels put pressure on major ports in Africa to invest in capacity expansion. The Mombasa Port was no exception. The expansion project that will be completed by the end of 2014 will ensure that Mombasa retains its positions as a major port in Africa. 
For detail please go to http://eaers.blogspot.com/2012/11/expansion-of-Mombasa-port-begins-in.html

Konza City's ground breaking this month

The ground breaking ceremony for KonzaTecho city will take place before the end of this month, we can report.
We have reliably learnt that the ceremony, which was slated for last Month was post phoned due to security Concerns and the President's busy Diary.
"The President is keen on the project," said the source. The line Ministry, the Ministry of information is ready for the ceremony and is only waiting for signal from the president's Office.The President was due to lead the ground breaking ceremony.
 Top Ministry of information officials met earlier this week to review its preparedness and all is set, said the source. They are now awaiting the date from OP to roll out. The US$7 billion Techno city is billed the silicon Savannah. Some investors are already rearing to go and were beginning to worry about the delay.
For more details on the story Go to http://eaers.blogspot.com/2012/09/konza-techno-city-begins-in-october.html

Oh no! Not the World Bank again!

A windfarm: LWTP proposes to build a similar project

The World Bank has pulled out of Africa's largest wind power project, we have reliably learned. The bank, according to reliable sources, says the project is not viable and has therefore refused to offer guarantees sought by financiers.

This is the third project in Kenya the World Bank has sabotaged in the last six years citing feeble excuses. In 2010 its private sector lending arm- IFC pulled of Southern by pass in Nairobi at the last minute citing the "credibility of some of the contractors."  In 2006 IFC also pulled out of the concessioning of Kenya and Uganda Railways at the last-minute, also citing "unfulfilled conditions" by Sheltham Railways. The concession is still fighting for its life, six years on.

The World Bank is also said to be raising  irrelevant issues on the Kenya- Ethiopia Power connection deal-that could derail it.

 In the case of Lake Turkana wind power project, The World Bank is says that the wind farm is too big for the national power grid and huge amounts of electricity could go to waste. This, argue the mandarins at the Bank, would deny LTWP revenues and hurting its ability to repay the loans. 

Bujagali Hydropower: Was a victim of World Bank's
feeble Analysis

This is an argument that analysts find baffling. If the problem is the capacity of the national grid to distribute all the power produced in the country, the solution is to upgrade it not to try to kill a project, analysts argue. 

It is noteworthy that the bank was using the similar arguments against Bujagali Hydro power in Uganda, and is using similar arguments to stall Karuma power plant, also in Uganda. In the case of Bujagali, the the bank and its cohorts were proved wrong. The plant produces 250MW which has doubled electricity supply in Uganda, but sources indicate demand will exceed supply in the next two years.

The Bank wants to the capacity of Karuma dam reduced from 600-750MW to 400 -450 MW arguing that 700MW is excess capacity that cannot be sustained. Sound familiar?

In both cases, Uganda has demonstrated boldness and leadership  in pursuing projects that are critical to national well being. Bujagali was built despite objections. Karuma dam also appears headed in the same direction.

 In Kenya, the southern by-pass in Nairobi, which was meant to be toll-road when IFC pulled out, has now been funded by China and construction is on-going. It is a public road but going by Kenya's paradigm shift, we shall not be surprised if it becomes a toll-road on completion.

In the case of LWTP, the government  turned to the World Bank to offer sovereign guarantees after the financiers ' reluctance to fund the project on the strength of its PPA with Kenya Power and Lighting company, the power distributor in Kenya.  The Kenya government was reluctant to offer the sovereign guarantee  for a private sector funded project. 

However, it seems, it will have to offer such guarantee.  It has already been endorsed ans a flagship project by the   Vision 2030 delivery secretariat. Vision 2030 is the long term  development blue print for Kenya.

 All is not lost however for the lead financial arranger; AfDB has re-affirmed its commitment to finance the project. "The African Bank is now looking at ways of getting other guarantors to ensure the project does not delay further," local media reported.

The €582 million Lake Turkana wind project in Northern Kenya will produce some 300MW of wind generated electricity, also another first in Africa. That will be close to 40 per cent of the electricity currently generated in Kenya. LWTP has a 21 year PPA with KPLC to sale electricity to it at less than 10 US cents per unit, the cheapest in the country.

Lake Turkana wind farm will be located on a 40,000-acre farm in Loyangalani in Marsabit County. It will comprise of 365 turbines each with a capacity of - 850Kwh; the associated overhead electric grid collection system and a high voltage substation.

Already a contract for the construction of 300KM of road in the project area has been awarded.

Kenya Railways seeks investors for mini-cities project

An artists impression of Mombasa City

Kenya Railways Corporation is shopping  for investors to develop mini-cities on its idle land.The project to be build on 320 acres of land spread across threein the country will cost US$$3.0 billion, 

The mini cities will change the skyline is some of te cities, increase business activity, including tourism and light manufacturing in additon to turning the host cities into transport hubs. The corporation isthius targetting the kind of developers that are bidding for leases in Konza City.

To be developed jointly with investors on a long-term lease, the projects will be developed in Mombasa, Nairobi and Kisumu. The developments will  include; ultra- modern Railways stations, direct rail links with the international airport in the host city, commercial buildings, an industrial park, shopping arcades and resorts, malls and restaurants among other facilities. 

The project is designed to complement the facilities in the cities. In Nairobi, the corporation hopes to put up a US$1.4 billion mini-city on 200 acres of land on which it will build ultra- modern Railway station, direct rail links with the JKIA, two five-star hotels with a capacity of  accommodating 1,500 persons each, commercial buildings, an industrial park, shopping arcades, resorts, malls and restaurants among other facilities. Nairobi is expected to grow into a transport hub in the region.

The development in Mombasa will cost US$0.95 billion and will comprise of a variety of Commercial buildings; an international exhibition Centre, business park for light manufacturing; three Hotels with conference facilities for 1000 people a piece; a  Shopping arcade, malls and restaurants and an entertainment park; 

 In Kisumu, the project will cost US$806 million and will open up Kisumu city to the world. Apart from the usual railway services, the city will enhance Kisumu’s status as the transport and commercial hub of the great lakes region. 

 The development will include a variety of commercial buildings; Business park for Light manufacturing/assembly; two Hotels with conference facilities for 1000 people each, a shopping arcade, malls and restaurants; a BPO park; an  entertainment park; ultra-Modern railway station


For more details visit :http://eaers.blogspot.com/2012/03/coming-soon-railway-cities-in-kenya.html

Kenya to Silence $60m worth of Fake Mobile Phones

KENYA WILL, for three days effective this Sunday, disable an estimated 2.5 million fake cellular phones. The exercise will cost phone owners at the minimum, US$60m. Phone operators on the other hand will lose an estimated US$118,000 a month in lost revenue or US$ 1.4 million a year. Commonly known as Mark Juma Mtambo, fake handsets comprise 8.5 percent of the total number of handsets in the country at the end of June 2012. This will reduce Kenya’s cellular tele density 67 per cent from 74 per cent at the end of June 2012.

There are 29.2 million telephone handsets in Kenya, four million more than the adult population of 25 million. Silencing of Mark Juma Mtambo will reduce the number to 26.8 million handsets, still more than the adult population anyway.

It is not clear how big a chunk of the market each provider will lose.  Our Calculations show that if each provider was to lose 8.5 per cent of its subscriber base, all will lose more subscribers than they signed up between March and June 2012.

Safaricom, the largest provider with a massive 19 million subscribers could lose as much 1.6 million subscribers- which almost five times more than the new subscribers signed up between March and June 2012. The second Largest provider, Airtel, would lose 383,000 subscribers, way higher than the new subscribers signed up between March and June. Yu and Orange will lose 221,000 and 263,500 subscribers respectively.

The problem could be compounded by disabling of all unregistered Simcards.  It is not clear what is the size of unregistered Sim cards. However this can be mitigated by the subscribers simply registering their SIM cards. However, the counterfeit phones cannot be mitigated.

What are counterfeit phones? Counterfeits of phones or other products are products that sale in the name of other brands. They are what is called intellectual property thefts where, manufacturers fake the brand name of an established brand and passes his products as that brand. Counterfeits, euphemistically called replicas, are products of questionable origin, quality and safety.

And they are a threat to economies, manufacturers and the innocent consumer. Governments feel the pinch as they lose out on uncollected taxes, legitimate industry loses its rightful share of the market to pirates and consumers are exposed to substandard, falsely labeled and possibly dangerous goods. The image of the well-established brands is also destroyed.

According to CCK, as at the end June2012, the average use per handset in Kenya was 77.7 minutes per month. At the same time, reported CCK, the average tariff was Ksh 4.00 per minute. Disabling counterfeit phones alone will cost some Kshs 10million a month in lost revenue to mobile operators. According to CCK, the industry's turnover was Kshs 104,552 million (US$1.2 billion) in 2010. Therefore the financial loss to the industry will be insignificant.

However, say analysts, these figures are purely speculative. Some operators, they say, have protected themselves by selling the handsets. But the numbers indicate the kind of damage counterfeit products can inflict on consumers.

Regardless of who will be affected to what extend, the disabling of counterfeit phone handsets will cripple many businesses, particularly the vendors of such handsets who will be forced to close shop. Some, informed sources say, are already feeling the pinch as consumers are now shunning suspect handsets.

Consumers will lose for they shall be forced to fork out more money to invest in new genuine handsets in order to remain connected. Most were attracted by the price tags which are generally lower than the genuine products. The cheapest genuine handset in Kenya is about Kshs 2000 (US$22). This means that the 2.5 million subscribers will have to invest a further kshs 5 billion ($60 million) in new handsets.

While the counterfeits handsets will tossed out of the window, the genuine brand makers will be smiling all the way to the bank. Will Kenya become the darling of investors in genuine mobile handsets? Only time will tell.

Kenya –Ethiopia to trade in electricity

KENYA AND ETHIOPIA will soon launch a power trade deal that will earn the latter an estimated US$400 million a year.  Kenya for her part will not only eliminate the US$500 million in thermal power costs, she will also enjoy cheaper power tariffs. This is perhaps the first electricity trade deal in Africa.

 To enable the trade deal, a 1068KM high Voltage direct current (HVDC) electricity highway between Ethiopia and Kenya. The project to cost an estimated US$1.26 billion will commence next and will last four years, being completed in 2017.

The project is co-financed by the World Bank, The African development Bank, the French Development agency and the governments of Kenya and Ethiopia. AfDB last week approved a US$337.5 million loan for the project. The World Bank is yet to approve the lion’s share of US$ 684 million. Analysts, however expect the Bank to move soon. AFD will cough some US$118.5 million while the governments of Kenya and Ethiopia will contribute US$88.5 million and US$31.5 million respectively.

The deal will see Ethiopia supply Kenya with 2,000MW of electricity at US$0.0065 per KWh. This will earn Ethiopia some US$400 million a year from 2018 onwards.  The Ethiopian Electricity generator EEPP has signed a 25-year PPA with Kenya power and lighting.

Ethiopia has the potential to produce 45,000MW of hydro – electricity- the largest in Africa. Currently she generates only 2000MW but is already expanding capacity to generate 11,000MW by 2017. The link will make Kenya an electricity trading hub in East Africa.

 Kenya, Tanzania, Rwanda, Burundi and DRC are members of the East African Power Pool (EAPP) and this link brings the dream of a regional trade in electric power closer. This would make Kenya an electricity power trade hub in the region.

 Apart from imports from Ethiopia, Kenya is also working hard to generate some 1800Mw of electricity by 2016 from other clean sources including: geothermal power and wind energy.  Kenya, the leader in geothermal power generation in Africa boasts of an estimated 10,000MW of geothermal power and another 3000MW of wind power.

Kenya has found off-shore LNG Gas deposits

Kenya has struck its first natural gas deposits near Malindi. Tullow Oil Plc , which partners with Australian oil prospecting company Pancontinental , announced the discovery this morning.

 It said that it has discovered approximately 52 net metres (about 170 feet) net pay of natural gas pay so far at the Mbawa deep-water well.

 The Mbawa 1 exploration well was drilled to a depth of 2,553m. It plans to drill the well further to 3275 metres. It said that the commercial viability of the find will be determined once the logs and sample analyses are completed.

Officials however, say that the “gas discovery is very promising and it is the first ever substantive hydrocarbon discovery offshore Kenya.”

"With drilling continuing to a deeper exploration target, these interim results may be the first part of the story in this well, and they are certainly just the beginning of the main story of oil and gas exploration offshore Kenya,” said excited officials.

This discovery comes exactly six months after Tullow oil, discovery 100metres of net pay of crude oil in the Turkana County. The find at Ngamia-1 well has raised hopes that Kenya of an oil find in Kenya.

 The new announcement raises Kenya’s profile as a potential Oil and LNG producer and exporter. Such discoveries have made the areas previously deemed as marginal lands to high potential lands. The discoveries, just in the neighbourhood of the proposed Kenya’s second transport corridor, Lapsset,  also raise its profile to highly viable business venture.

KAA’S Green Field terminal back on track

THE CONTRACT FOR the Construction of the US $640million Greenfield Terminal at JKIA is back on track. It had been sidetracked by disputes over the legality of the award. However, the Procurement Appeal Board has ruled that the contract was properly awarded and ordered KAA to sign it within a month. The tender goes to a Chinese construction firm, Anhui Construction Company,

Earlier, there was speculation that, CATIC construction company, the firm currently building Terminal 4 had won the tender. However investigation, by this publication have found this to have been a red herring meant to throw us off-guard by source who did not want us to know about the dispute.

Approval of the tender \means that ground breaking ceremony which was slated for August 2012, will now be pushed back. Sources indicate that the project is likely to start late October since this contract was the last hurdle in the process.

The supervision contract for the development of a green field terminal at Jomo Kenyatta international Airport, Nairobi is already in place. The terminal will be developed on a design, build, finance, operate and transfer (DBFOT) basis. The work will last 30 months, meaning terminal shall be completed sometimes in 2015.

The Greenfield terminal will have a floor area of 172, 000 m². It will be the premier hub terminal in Africa equipped for efficient connectivity for transiting passengers. It will have 50 international and 10 domestic check-in positions; 32 contact and 8 remote gates; an apron with 45 parking bays and linking taxiways and a Railway terminal.

The Greenfield terminal to be developed in two phases will expand JKIA’s capacity by 12 million passengers to more than 20 million passengers a year in Phase I. It will have a parking capacity, including “remote parking” for 60 aircraft bringing the total numbers of available parking slots over one hundred aircraft. It will also separate the arrival and departures gates.

The terminal complements a five- year plan that began in 2007 to expand the capacity of the airport from 2.5 million people a year to 6 million to date. The previous expansion plan which incorporates the construction of terminal 4 increased the size by creating a parking for 37 aircraft up from 20 previously. This phase cost a whopping US$200 million.  
For further details Read http://eaers.blogspot.com/2012/07/construction-of-JKIA’s-green-field.html

How Kenya became a market leader for Mobile Money transfer

 When I bought my first cellphone handset in way-back in 2000,  I was among the first lot of middle income Kenyans to own a mobile phone

 Then, Kenya was a laggard in adopting mobile telephony. We used to queue to make a call  at those phone booths owned by dear old Kenya telecommunication Corporation. To own a Telephone fixed line handset then was like owning ..well. It was not easy. You could wait in the queue of applicants for years. And you had to bribe every one  in the technical department to get a line.

I personally waited for four years for a  line-becauseI refused to bribe. What the fellows at telecoms did not realise is; they were killing the goose that lays the golden egg.

Then, we used to be regaled with stories of how Market women s in Uganda and Tanzania were doing business using their Mobile phones. Those are the times I was embarrassed to be a  Kenyan- except of-course when Paul Tergat, Catherine Ndereba, John  Ngugi and Paul Ereng were out there winning gold medals for Kenya.

Then the Mobile phone finally reached Kenya and we embraced it whole heartedly. To date, just 12 short years later, there are more mobile phone handsets in Kenya than there are adults. And we lead East Africa in this respect. By the end July 2012, there  were close to 30 million handsets in the country, never mind that an estimated 4 million of these are Mark Juma Mtambo (that is, fakes).

Five short years ago, Safaricom Kenya launched the mobile Money transfer, called M-Pesa. And I am proud that five year later this invention is a success story. It is the gist of the story from the world bank below.

The story says that in, addition to David Rudisha, Cheruiyot and all those guys who can do a Rudisha, M-PESA is a  gold medalist in the world. Well I am now proud to be a Kenyan.
To read the story Go to this link
http://blogs.worldbank.org/africacan/how-kenya-became-a-world-leader-for-mobile-money

Go Tanzania Go

 A couple of articles ago, I wrote in our sister publication that east Africa is headed  towards becoming amanufacturing hub in Africa. Go to http://eaers.blogspot.com/2012/05/east-africa-set-to-become-africas.html

One of my critics- probably a Tanzania wondered whether i don't  have anything better to say. My analysis was based on the fact that East Africa is becoming energy secure-meaning the region has more energy sources to choose from.

Now events in Tanzania prove that  I was not talking hot air. Reports indicate that Tanzania is beginning to take right choices and make right decisions. The country will soon begin construction of a 390MW gas fired electricity generating plant worth a US$598 million.  That in my view is the best decision  taken by Tanzania. 390MW of power is a significant  proportion of Tanzania current generating capacity. Some estimates place it at aroiund 30-40 per cent of the current output.

Tanzania has significant quantity of Natural gas, and more is being found every week.  This means that she has the potential to produce more gas fired electricity for herself and spare some for her energy starved neighbours. This being a reliable, cheap and clean source of energy, power rationing in Tanzania will soon be history.

Cheap power means low cost of production and therefore cheap goods and services. That is what is expected of  industry in Tanzania - efficient operations that produce cheap, quality products for the  domestic market and even  for the regional market.

What's more,  more power available means that TANESCO will have to connect more people, including the rural areas which would result in more employment in  the country.

Another step in the right direction is the decision to process gas in order to add value. Reports indicate that the construction started last week on a 532-km (330 mile) pipeline funded by a $1.2 billion Chinese loan.
So what should we say? Go Tanzania Go.

Another brick laid vision 2030 looks real

OlKaria I&ii generate 150mw. Ol KariaIV to add 280Mw 

O.K CALL ME AN OPTIMIST and I shall plead guilty as charged. In my vocabulary, half –empty glasses don’t exist-only half full.  At least half-full glasses can be filled.

But I shall announce to all and sundry that another brick has been laid for Kenya’s vision 2030.

Kenya’s President Mwai Kibaki, early this week commissioned what will be the largest geothermal power plant in Africa. It is the US$1.3 billion OlKaria IV which will produce a whopping 280MW of geothermal power by 2014.

Olkaria IV is co-financed by Ken Gen, World Bank, German Development Corporation, Japan International Cooperation Agency (JICA), the French Development Agency (FDA), and the European Investment Bank (EIB).

This follows hot on the heels of award of a €31million (ksh3.2 billion) contract for the construction and upgrading of more than 300KM of roads by the Lake Turkana wind power project. The contract was awarded to Mombasa based engineering and construction firm, Civicon Kenya.

The €582 million project in Northern Kenya will produce some 300MW of wind generated electricity, also another first in Africa. In short Kenya has formed a bad habit of firsts, firsts to send fellows to ICC, First in Olympics games pocketing a number of gold medals. I wonder why no one has thought of awarding us a gold medal in use of green energy.

Olkaria, once completed in 2014, will add e 25 per cent to Kenya‘s grid. And Lake Turkana wind which also comes on stream in 2014, will also add another 25- 30 percent to the grid. In short, come 2014 and renewable energy will contribute 750 MW of electricity to the national grid.

In political parlance renewable energy will form the majority, of power sources in Kenya. And with GDC also plotting to add another 1600MW of Geothermal power over the same year, we can say, renewable energy will form the runaway majority in power generation.-Where is that gold medal?

Thai Firm to enter east Africa's exploration industry

Thailand’s PTT E&P is poised to enter the east African LNG exploration industry if she pays some US$1.9 billion to takeover of Cove Energy Plc. after Royal Dutch/Shell bowed out of a five-month bidding war. PTTE&P had outbid Shell/BP by more than $300 million.

This acquisition will give PTT Exploration and Production exposure to the giant offshore discoveries made in East Africa in the past year. The region is emerging as a future LNG and crude oil giant and is well-situated to export into Asia.

Cove owns an 8.5 percent stake in a Mozambique license in the Rovuma offshore basin containing gas discoveries that could be a major provider of liquefied natural gas (LNG) to energy-starved Asia. She also has a 10 per cent stake in Ruvuma offshore. In Kenya, Cove Energy Plc. has a 10 per cent in offshore area 1.5; 10 per cent in 17; 25 per cent in 1.10A; 15 per cent in1.10B and a 10 per cent in 1.11A.

Shell quit the bid because they did not to pay for an overpriced bid, the company said.  PTT E&P price is said to be a premium. Shell could have found another suitor given that the fuels exploration field is awash with potential suitors.

 WE could be witnessing a repeat of the ATC privatisation saga in 2002. Both Kenya Airways and South Africa Airways were determined to control the Tanzanian Airspace for different reasons.  SAA was looking for a hub inland  while KQ was determined to keep competition at bay. So both outbid each other for a single plane airline, pushing the price tag to US$20 million.

South Africa Airways was determined to buy ATC and did everything, including political lobbying, to ensure that the deal did not go to KQ.   Sensing danger, KQ employed abit of guerilla tactics-. KQ sought and found a different suitor in the form of Precision Air, then pulled out of the ATC deal at the last minute. SAA became the only suitor but the marriage never lasted.

Shell, like KQ, has much at stake in the LNG market, hence its strong desire to get involved in potential new supplies.  Being one of the most experienced international majors, Shell is likely to find another suitor. Analysts point at a possible marriage between Shell and U.S. explorer Anadarko which has a 36.5 percent stake in the Mozambique license, but little experience of LNG.

Other points of entry to east Africa for Shell could include tie-ups with Italy's ENI, which has also found gas in Mozambique, or BG Group and Exxon Mobil, which have discoveries off the coast of Tanzania.

Analysts said PTT E&P would need to invest $1 billion-$1.5 billion into the project annually over the next few years.

The first brick to Africa's largest Wind power Plant layed

THE LAKE TURKANA  wind power project has awarded the first €31million (ksh3.2 billion) contract for the construction and upgrading of more than 300KM of roads. The contract was awarded to Mombasa based engineering and construction firm, Civicon Kenya.

The civil works contract forms 5.3 per cent of the entire project cost of €582 million. The road construction project will involve upgrading of the 204km road from Laisamis to the wind farm site. It will include upgrading of another 109 KM within the162Km² site for construction, operations and maintenance. 

The award of the contract is a signal that the World Bank divisions-IDA and MIGAS-may have guaranteed the €582 million debt or are very close to doing so.

The LWTP story is a story of dogged determination on the part of its promoters. It has been in the works for the last Nine years- a time long enough for the weak at heart to give up. It all started way back in 2006 when Willem Dollerman, who knew the site saw an opportunity for wind power generation as the cost of crude oil shot past US$50 per barrel.

There followed a string of activities including registration of Special Purpose Vehicles (SPVs) in Europe and Kenya to promote the project.  There followed a creative way of fundraising by way of selling shares in the Europe registered SPVs –KTF-Energy and KP&P Africa,  by private placement to finance initial stages.

 A feasibility study established the reliability of the wind flow at 11metres per second. Then a 20-year PPA signed with KPLC. This paved the way for institutional financiers to have serious look at the project.

The awarding of civil works contract lays the first brick close to the production of the 300MW wind electricity. The construction of the roads will last 15 months paving the way for the transportation of the wind turbines and transformers to the site. The first 90 MW of power is expected on stream early 2014.

Read related stories at

 http://eaers.blogspot.com/2012/07/africas-largest-wind-project-still.html

http://eaers.blogspot.com/2012/01/africas-largest-wind-power-farm-set-to.html

EOI for feasibility study on dry port in Dar, Tanzania

The Tanzania Ports Authority has floated an EOI, expression of interest, for a feasibility study on the development of  a dry port at Kisarawe. The consultancy’s objective is to determine the viability of developing the dry port under a Public Private Partnership (PPP) arrangement.

This is a multi-discipline consultancy whose deliverables include; economic and financial analyses, environmental and social impact assessments and detailed engineering designs and cost-estimates.

According to an advertisement in PPP infra world, the scope of the services will include but not limited to the following activities:

i) To conduct a comprehensive land use survey (Cadastral survey in Kisarawe District

ii) To conduct a detailed feasibility study that examines the economic, financial and technical rationale for developing a Cargo Freight station in Kisarawe District

iii) To prepare viable outline designs for the dry port, road and rail accesses and provide all Front – end Engineering and Design, cost estimates and drawings

iv) To conduct a preliminary EIA and Social Impact Assessment and develop mitigation measures

v) To identify and analyze potential risks, impacts the likelihood of occurrence and the possible mitigation measures for the recommended PPP options.

A pre-feasibility has concluded that Kisarawe district, to the South West of the port of Dar-Es-Salaam is an ideal location of the dry port. The dry port is expected to ease congestion at the port of Dar-Es-salaam, the largest port inn Tanzania. 

The port of ar-Es-salaam  has a capacity of 4.1 Million tons of dry cargo and 6 million tons of bulk cargo a year.  However, it has come under increased pressure due to increase in demand for imports in Tanzania and also in the neighbouring land locked countries. The dry port will handle bulk cargo and cars landed at the Port.   


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Turkana zooms into limelight-and riches

THE ONCE GOD FORSAKEN  Turkana country is emerging from the debris into an international limelight for all the good reasons.

Initially famous for famine and cattle rustling, Turkana will soon be bustling in Glory and riches. The county will soon become Kenya’s saviour-at least in terms of energy. Oil has been found in the county. That discovery has excited this country. And some ambitious people, hoping to become oil sheikhs are considering ditching Kenyan cities for Turkana. I hear some  are considering trading their posh SUVs for the Carmel. So I expect the price of Carmel to rise tenfold-again putting the pastoralists at a disadvantage.

 Even before the discovery of the black gold, Turkana was putting its name on the world Map.  Africa’s largest wind power farm that shall generate, 300MW of cheap electricity was being planned. If the financial deal closed today, today being the last day of March, then   construction would begin soon thereafter. That mean Africa’s largest source of cheap power will compete for space with the world’s most expensive source of energy in the same county. What an irony!

The greatest beneficiary of this competition is the proposed Lake Turkana resort city. This is a must because the mandarins and oil sheikhs will need a place to rest their tired bones at the end of a long day. 

The Turkana themselves will gain big. I have seen a document in which one investor is required to supply local communities with clean drinking water, health and education facilities over and roads over the next 20 years. Now let’s face it,  investor in Turkana will be required to provide social- infrastructure as part of their CSR, then in the next 20 years, Turkana county will over supplied.

Just fancy that, a country with more toilets or schools and health centres than it requires. Apart from exporting oil and wind power to Kenya and the rest of the world, Turkana county will also be exporting educational, medical services to the neighbouhood which includes parts of South Sudan and Eastern Uganda.  

 Turkana is quite advantaged. It is bang on the Lamu Transport corridor which means soon, major trunk roads, Standard Gauge Railway line running high speed trains, an Oil Pipeline  from Uganda, South Sudan and of course Kenya. What does the word marginal areas mean? Turkana county, stand tall your time has come!

Mombasa 's water sector crying for investment

During my shot hop to Mombasa last week, I confronted a problem that confronts every resident of the city- dry taps. So to freshen up, I bought a 1.5 litre bottle of bottled water and did some dry bathing.

I wonder how many of you convert significant quantities of drinking water for bathing. 

Back to my experience, so I used 1.5 litres of bottled water to freshen up. Now Mombasa last week was quite hot-and so was Nairobi. Therefore one really needed quite a dip to freshen up.

So I did something similar to a bath and rushed to my appointment. At the tail end of the appointment I mentioned to my host how scarcity water is a serious issue in Mombasa. That comment opened the taps to the following story. My host, a relatively well informed Mombasan, said:

“Demand for water in Mombasa is 18 million litres a day. Currently, its capacity is only 5 million litres a day, which is less than a third of the total demand. To make matter worse, even this quantity never reaches the town.”

Much of the water distribution system to Mombasa is old and rotten. This means that even this little quantity of water also gets lost on the way due to leakages. In Effect, about three or four million litres of water reach Mombasa every day. That is a drop in the ocean.

My source continued. It is not all gloom for the city. The old system is now being replaced so that even the little quantity produced reaches the consumers. After that the authorities will have to work on expanding the supply to meet demand. That, my host said, is the reason why there is a major shortage of water in the city. The old pipes are being ripped off and being replaced with new ones.

My efforts to raise the coast water Authority for comment were fruitless. However, this is a business opportunity crying for investors. Mombasa is crying for a PPP in the water and sewerage sector. Any takers out there? see http://eaers.blogspot.com/2012/03/Africa-high-return-ppp-market-of.html

The night Bus to Mombasa

After penning the piece on Lamu port ,I was send on an urgent assignment to Mombasa. I took the night bus. In fact, the 11o'clock bus, which is  the last bus from Nairobi.


As I watched the night pass-by I  noticed that a majority of the towns along this highway, from Mlolongo to Mazeras operate 24 hours. I noted road side Kiosks and vendors selling  fruits, vegetables, snacks and candies.


 Boda boda men were on hand waiting for any willing customer; Restaurants were up selling their stuff. In most of the towns, especially from Mtito Andei to Salama I counted not less than 50 long -haul trucks parked. That is business to the local economy folks.


As the night wore thin and day began to break, we approached Mombasa and the towns from Taru all the way to Mazera were a bee-hive of activity.


Since the thoughts of what could be in store for lamu were still fresh in my mind,I began to ask: Is this what is in store for  lamu and the long stretch of arid land to Moyale and beyond? 


The opening of Lamu Port is not just good news for Ethiopia and south Sudan. But even the folks along its route will gain immensely. Soon we shall find the entire route open 24 hour a day. No wonder the port, it is said, will generate an additional three percent to Kenya's Gross domestic Product, GDP. The Port will also gain  in status when it links with the Mombasa-Addis  road at Isiolo.  see http://eaers.blogspot.com/2012/02/road-that-open-950million-volume-of.html

Lamu Port's Construction begins Friday

 Kenya’s town of Lamu will this Friday March 2, 2012 be thrown into a lime light of gargantuan proportions. It will play host to three presidents in an event that will change Lamu forever.

The three Presidents will be there for the ground breaking ceremony to mark the beginning on the construction of Lamu Port. The second seaport in Kenya, Lamu is also the head port in the Lamu-South Sudan Ethiopia transport Corridor.

Consequently the presidents of South Sudan, Salva Kiir and Ethiopian PM, Meles Zenawi will witness the groundbreaking ceremony by the Kenya President, Mwai Kibaki.   The Kenya government is said to have set aside US$2.5 billion for the construction of 3 of the 32 bays. Seehttp://eaers.blogspot.com/2012/02/kenya-to-begin-construction-of-gateway.html

South Sudan plans to build a US$4 billion Oil Pipeline from its wells 2000 KM away to Lamu Port. Ethiopia is also looking at Lamu as the shortest export route for her. What’s more the construction of the port could motivate the construction of the trans-Africa Railway line between Lamu in the Indian Ocean coast and Port of Doula in Cameroon on the Atlantic Ocean.

The visit is therefore a significant one for a town only known for cultural tourism and donkey racing during Maulid celebrations. Lamu is not just another seaport. It is a series of projects linking Africa to the world. Not only that, it will also open Kenya’s God forsaken Northern frontier for economic exploitation. Africa had better sit up and take 

Kenya rated second best investment destination in Africa

Kenya has been rated top frontier investment market in Africa, second only to Nigeria, in a survey conducted by the Economist Intelligence Unit (EIU.

The survey sampled 158 international fund managers and investment bankers. Of these 76 (48%) rated Kenya as offering the best prospects for institutional investors over the next five years.

The other 81 (52%) said Nigeria was better. The survey is set to generate renewed international investor interest in the stock market, stemming the sell tide sparked off by the Crisis in Eurozone. The market capitalisation has shed off 28 per cent so far.

The survey showed a shift to long-term investment strategies from more speculative and short-term bets. A third of the respondents said they will invest at least five per cent of their portfolio in Africa. This new finding is in sync with our earlier report that said Africa is the next best investment destination. See http://eaers.blogspot.com/2012/01/africa-next-big-investment-story.html

 This comes as good news for Kenya that is now seeking a huge pile of cash to build infrastructure. The country needs more than US $44 billion in the next five- to -eight years to build new ports, roads and railways and to improve water and electricity supply.http://eaers.blogspot.com/2011/12/kenya-rearing-to-become-ppp-playing.html

 To sweeten the deal, Kenya will next month table for debate in Parliament a PPP, said Joseph Kinyua, permanent secretary at the Treasury. The bill will clarify the legal basis for Public-private partnerships, PPPs, and streamline the contracts.

Kinyua told a meeting of government departments and private sector representatives that the Treasury would raise some funds for these projects from the private sector.

"It is currently estimated that there is a funding gap of approximately $44 billion that is needed to address the infrastructure requirements in the next five to eight years," he said.

"The PPP (Public-Private Partnership) arrangements, therefore, offer an opportunity for Kenya to attract enhanced private sector participation in financing, building and operating infrastructure services and facilities in order to close this huge funding gap."

Kenya’s development Blue-Print - the Vision 2030 - forecasts the economy to grow by 10 percent a year by 2030. The government project that the country will become a middle-income country by 2030. Infrastructure development is the driver of this ambitious plan.

In its 2011/12 (July-June) fiscal budget, the government proposed to raise 35.85 billion shillings ($432.7 million) in infrastructure bonds, up from 30.5 billion shillings the previous year.

The government is also in the process of getting a $600 million two-year syndicated international loan to finance infrastructure development. 

A large Commercial bank? Hop over to Rwanda

Rwanda is looking to license large commercial banks that have the financial muscle to bankroll large investment projects in the east African country. 


A good economic c performer, Rwanda's economic growth is project at 7.6 percent this year. The Governor of the central bank Governor Claver Gatete  told the press in Nairobi  that his country is eyeing banks with the financial muscle to lend Upto US$100million.


Rwanda boast of  nine commercial banks and hundreds of microfinance institutions. However, it wants  banks that can underwrite the country's economic development .


The banking industry in Rwanda was healthy, Gatete said, with the capital adequacy ratio standing at at 27 percent last year, against a statutory requirement of 15 percent. generally the operating environment is suitable.


Last year, Bank of Kigali, one of the largest banks in rwanda listed at the local Bourse. Kenya commercisl bank, one of the largest bank in kenya, was the first to list at the Kigali securities exchnage tw years ago. Now Equitybank another large Kenyan bank has been lisenced to operate in Rwanda


Gatete also said Rwanda plans to reduce loan defaults in the industry to 5 percent of total loans in the medium-term, and cut non-performing loans in the industry to under 7 percent this year from 8 percent, to ensure the sector's continued health.


Total outstanding credit by banks in the country stood at 509 billion Rwandan francs ($847 million) at the end of last year, he said.


Gatete said the main risks facing the country's projected growth of 7.6 percent this year - from a forecast 8.8 percent in 2011 - stemmed from the euro zone debt crisis.


"It all depends on external shocks. We don't know what is happening in the euro zone which is one of our big trading partner," he said.


"We don't know what factors will drive oil prices. It also depends on whether the famine in the Horn of Africa will persist."


The projected growth for this year will be driven by the agricultural sector, tourism and exports, which grew by 53 percent last year to almost $400 million, Gatete said.


"We expect significant growth this year now that the government is making it a priority to support the export market," he said.


Year-on-year inflation is projected to stay below 7.5 percent this year after hitting a high of 8.3 percent in 2011.


Gatete said the franc's exchange rate would be stable to the dollar with market forces determining the rate.


"For us, we intervene when there is any kind of shock ... we have sufficient reserves," he said, adding the central bank holds forex worth 7.7 months of import cover, way above the stautory four months.

Tanzania gets euro 50 M loan for airports

Tanzania has signed a 50 million euro loan facility with the European Investment Bank (EIB) to upgrade regional airports to boost tourism and air transport, the local press reported today. Tanzania is east Africa's second-biggest economy.

The cash will be used to upgrade Kigoma, Tabora, Bukoba, Shinyanga and Sumbawanga airports. "This project will significantly open up and ease transport to and from the regions as it will provide access to cost-efficient air transport ... some of the regions are potential for tourism activities,"  said Ramadham Khijjah, permanent secretary in Tanzania's finance ministry.

Projects include the replacement of runways, and the reconstruction of taxiways and passenger terminal buildings.EIB is  a key player in Tanzania's infrastructure development, with the bank having previously loaned the country $134.5 million for a power project.

Tanzania earned $1.4 billion from tourism in the year ended October 2011 from $1.2 billion a year ago, helped by a rise in tourist arrivals, according to central bank statistics.

Kenya-Airways in the largest Rights issue in EA

A KQ aircraft.The youngest fleet in Africa

Kenya Airways’ will soon raise US$262 million through a rights issue floated in the three securities in East Africa by the end of this first half of this year. The Kenyan national carrier is cross-listed in the three exchanges.

The issue, the largest in East Africa is meant to support the airline’s 10- year expansion plan. The plan incorporates both fleet and destination expansion. The airline plans to raise its fleet to 107 aircraft by 2020 from the current 37 aircraft<its plans to acquire twelve cargo freighters by 2022.

Kenya Airways is the most profitable and successful privatized airline in Africa. In fact it is a case study of successful airline privatization. It is owned 23 per cent by the Kenya government, 26 percent by the Dutch Airliner KLM, and 51 per cent by local investors.

The airline has already ordered Nine Boeing 787 Dreamliner to be delivered in the next three years or so. It has the youngest fleet in Africa with many of its aircraft being less than 5 years old.

Kenya Airways or KQ as it is popularly known. It flies to 56 destinations world wide. 41 of these are in Africa. It plans to increase its destinations to 115 destinations from the current 56.

The rights issue is expected to boost the number of shares at the Uganda and the Dar es Salaam bourses.

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