African Development Bank funds EA hydro project

The African Development Bank Group’s (AfDB) on Thursday  approved US$ 113 million for the 80MW Regional Rusumo Falls Hydropower Project. The  African Development Fund (ADF) and the Nigeria Trust Fund  will cough US$97.3 million   while the the Sustainable Energy for All (SE4All) window  approved a grant of US$16 million. The project will benefit Tanzania, Rwanda and Burundi.

“Africa has incredible untapped hydropower potential: only four per cent of which has been exploited,” explained Alex Rugamba, Director of the AfDB’s Energy, Environment and Climate Change Department.

“Through projects such as the Rusumo Falls project we are looking to leverage Africa’s natural assets for universal access to modern, reliable and affordable energy services on the continent,” Rugamba added.

The development agency said in an official statement that the construction of the transmission facilities of the power generation plant is expected to be completed by August 2018 with the three beneficiary countries sharing the power equally and Burundi receiving 50 percent of it’s current peak power demand.

“The project will enhance the process of regional integration by the countries developing and managing the joint assets,” AfDB said.

The Rusumo Falls is on Kagera River in Rwanda. The  project is a Programme for Infrastructure Development for Africa (PIDA) priority project. In 2012, African Heads of State endorsed a set of priority energy projects to be implemented by 2020 as part of the PIDA.

Rusumo Falls is one of nine hydropower projects identified for the PIDA energy infrastructure program, which focuses on major hydroelectric projects and interconnects the power pools between countries.

Mombasa-Kigali Railway to be launched on Nov.28th

A railway Line Under construction.
This is how we do it

The ground breaking ceremony for the Mombasa –Kigali standard Gauge Railway line is slated for November 28^th, we can report. This marks the beginning of the construction of the US$ 13.5 billion 2937KM standard Gauge railway line sponsored by the governments of Kenya, Uganda and Rwanda.

Kenya has already secured US$3.75 from China for the construction of the line and rolling stock. The Kenyan side of the line will cover some 1185km running from Mombasa through Nairobi to Malaba with a branch line to Kisumu. This section is expected to be completed by 2017. The entire project is expected to be complete by 2018.

Mombasa  Port: Congested

 Across the borders the project will involve; a 1,400km rail from Malaba to Kampala and branching to four Ugandan towns before connecting to the main line to Rwanda at Mirima Hills; a 200km rail from Mirima Hills to Kigali and an extra 150km rail to other towns in Rwanda.

The new line will enable passenger trains to run at 120Km per hour while freight trains will do 80km per hour. It is expected to cut freight costs from the port of Mombasa to Kisumu by whopping75 per cent from about US$1,648 to US$353 per 20 foot container.

The Mombasa Port-Kampala-Kigali Railway line, christened Mokaki, comes at an opportune time as the Port of Mombasa, the largest Port in east Africa, is also being expanded to meet the growing demand. The Port which handled 21 Million tons of freight last year, plans to raise its capacity to 40 million tons a year from 2015. Read http://eaers.blogspot.com/2013/07/kenya-ports-post-panamax-project-ahead.html

 Freight to and from Uganda and Rwanda stood at 23 million tons last year and grows at three percent a year. A part from imports, growing trade between Kenya and her two neighbours will also benefit from the construction of the high-speed Railway line. For further reading visit: http://eaers.blogspot.com/2013/07/coming-soon-mombasa-kigali-express.html

Kenya's power generator seeks US$5.5 bn to expand output

Kenya Electricity Generating Co., the East African nation’s biggest power producer, said it will seek to raise $5.5 billion through a mix of 70 percent debt and 30 percent equity to finance a doubling of its output capacity, reports Bloomberg.

Development finance institutions, export agencies, commercial banks and other lenders will provide about $3.85 billion, while $1.65 billion will come from joint ventures, a rights offer and revenue, acting Chief Executive Officer Simon Ngure told reporters today in the capital, Nairobi.

KenGen, as the company is known, plans to generate 2,500 megawatts of additional capacity over 40 months, representing half of the government’s target to boost installed capacity by 5,000 megawatts by 2017, he said.

“We need this power  to drive economic growth in this country,” Ngure said.

With the economy growing and the population expanding, electricity consumption in Kenya is rising an average of 8 percent a year. KenGen produces 1,239 megawatts, while four private producers account for the remainder of the countrywide installed capacity of 1,664 megawatts, according to the company.

The state owns about 70 percent of KenGen, which currently relies on hydropower generation that is affected by recurrent drought. President Uhuru Kenyatta said in September the country plans to become more reliant on natural-gas and coal-fired generation to lower costs by as much as six-fold.

East Africa’s biggest economy is preparing to sell its inaugural Eurobond to raise as much as $2 billion by early next year to fund infrastructure development such as power projects.
KenGen is also considering a bond offer and in addition may sell an asset-backed bond linked to geothermal resources, Ngure said. Kenya is Africa’s largest geothermal-power producer.

“We are thinking about a year from now but we need to work on the numbers,” he said. “The size will be driven by the market and the value of the steam.”

The company yesterday announced profit surged to 5.25 billion shillings ($61.7 million) in the 12 months through June from 2.82 billion shillings a year earlier.

Safaricom SACCO calling Kenyans in the Diaspora

THE Safaricom Investment Cooperative is developing a Kshs 1.0 billion shilling housing project in Mlolongo dubbed Blue Bells Gardens. Blue Bells Garden is the Cooperative’s first housing project and the only one of its kind in Mlolongo.

The 300 unit project is being put up in partnership with the Co-operative Bank and is expected to be fully completed in 2015.

The phase one of the two-phase project will build 160 units while in the phase two, 140 units will be build. A three-bedroom flat will retail at Kshs 6.6 million while a 2-bedroom unit will cost Kshs5.6 million.

 Blue Bells Gardens is a top of the range residential facility nestled along the busy Nairobi-Mombasa Road Highway and ICT center. It will have a world class health care facility and a commercial center with large open spaces for children’s play grounds.

Ms. Mackrine Abukah, the Chairperson of Safaricom Investment SACCO announced that it is inviting non-safaricom staff to join the SACCO. To join one needs to pay a subscription fee of Ksh 6 000 and a monthly subscription of kshs 325.

She also announced that the SACCO is open for Kenyan in the diaspora whom they are inviting to invest in the Mlolongo housing project either as buyers or investors in the SACCO. The modalities for Diaspora membership are being worked out, she said. Apart from the Mlolongo development, the SACCO also owns plots in Kajiado, Nanyuki, Kisumu and Machakos on which she develop houses for sale.

At  the end of last year, the SACCO had a capital base of Kshs.503.78million up from Kshs.273.13million in 2011.

The development is targeting middle to upper income earners working in Nairobi and Machakos counties. She is targeting Kenyans in the diaspora to help them invest in housing and help curb the runway housing shortage in Kenya. Kenyans in the diaspora have been duped by dishonest people in the past.

AfDB Launches US$1.26B Kenya – Ethiopia Electricity Highway

The African Development Bank today launched the 1,068-kilometre high-voltage electricity highway to be built between Kenya and Ethiopia.

The project, which is expected to be completed in less than five years, involves the construction of transmission lines of about 437 km in Ethiopia and about 631 km in Kenya and associated AC/DC converter stations at Wolayta-Sodo (Ethiopia) and Suswa (Kenya) substations with a transfer capacity of up to 2,000 MW in either direction.

Speaking at the launch, organized to brief on the project’s technical resources, African Development Bank’s Regional Director for East Africa Resource Centre (EARC), Gabriel Negatu, reiterated the importance of the project to the East Africa’s cross-border trading.

“The African Development Bank recognizes of each of the country specific economic blueprints as well as the region’s economic priorities. This project establishes power trade between Ethiopia and Kenya and the wider East Africa region. It not only improves electricity access at affordable prices and enhances cross-border trade, but also provides an important opportunity to generate revenues for countries having excess power generation capacity, as is the case for Ethiopia,” said Negatu.

He added: “The direct beneficiaries of the project are households, businesses, and industries in communities located in Kenya, the direct off-taker of the power. The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 households by 2018.”

AfDB played a leading role in the preparation of the project by financing some of the feasibility studies required to making the project bankable.

The African Development Bank, the World Bank, the Governments of Ethiopia and Kenya will finance the project. In addition the French Development Agency expressed interest to finance the project.

The financing for the project breaks down as follows: African Development Bank, US $338 million; World Bank US $684 million; Government of Ethiopia, US $32 million; Government of Kenya, US $88 million; and the expected financing from the French Development Agency, US $118 million.

The African Development Bank’s financing will be used for the financing of the total cost of the transmission line subcomponent and part of the cost of the converter station subcomponent in Ethiopia; part of the cost of the transmission line subcomponent in Kenya; the total cost of the consultancy services for supervision and management for both Ethiopia and Kenya, as well as part of the cost of capacity building component in Ethiopia and in Kenya.

The World Bank’s financing will be used for the financing of the total cost of the subcomponent converter stations in Kenya and total cost of transmission system reinforcement in Kenya and the major part converter stations in Ethiopia as well as part of the cost of the capacity building component in Ethiopia and in Kenya.

Financing from French Development Agency is expected to cover part of the transmission line subcomponent for Kenya. This story was lifted from the Afdb website unediuted.Pleaase read

 http://www.afdb.org/en/news-and-events/article/afdb-launches-us-1-26b-kenya-ethiopia-electricity-highway-11733/?ut

IFC's foray into African capital markets

THE INTERNATIONAL Finance Corporation, the private sector arm of the World Bank, has launched its foray into Africa’s capital markets. It will begin by issuing a US$50 million equivalent bond in the Nigeria Securities Exchange. Next in line will be Kenya which said to have issued the necessary approvals.

Kenya and Nigeria are among the 10 securities exchange targeted for IFC’s Pan-African Domestic Medium-Term Note Programme. Other countries targeted include Botswana, Ghana, Kenya, Namibia, Rwanda, South Africa, Uganda, and Zambia.

 The programme will see IFC issue local currency bonds in the targeted countries to support the local private sector and also the capital market, says a statement from IFC. While the domestic capital markets are excited about IFC’s foray, they are concerned at the small amounts it is issuing. “US$50 million in the Nigeria market is not even a drop in the ocean,” say analysts.

 It is not clear what the size of the Kenyan issue will be. However, it could be in the same region as the Nigerian issue US$50million. IFC’s entry into any market raises its profile among investors and fund managers leading to more foreign activity in the local markets. IFC, said a Kenyan Banker in whose bank IFC is an investor,” is a confidence builder. If it invests in your stock, other investor follow suit.” 

Consequently, the markets are excited and are seeing even increased activity in anticipation of IFC’s entry.

Stock market players in Kenya agree saying IFC’s entry into the market is a vote of confidence in the market.  Stock brokers in Nairobi say IFC’s entry will raise NSE’s profile among skeptics in West. Africa whose bond market is generally small is likely to witness a huge influx as countries issue infrastructure bonds to finance their huge infrastructure programmes.  

Kenya has already floated More Kshs 100 billion (US$1.2 billion) infrastructure bonds