JKIA gets LPoD certification

KQ: Last hurdle down

The US government has finally granted JKIA Last Point of Departure status which allows the airport to facilitate direct flights between Kenya and the United States of America. 

This means that  Kenya Airways can make the maiden direct flight from Nairobi to New York t from Jomo Kenyatta International Airport (JKIA) on October 28, 2018. 

“This is a major achievement for Kenya as JKIA becomes one of the elite African airports to be certified as aLast Point of Departure to the United States.

 JKIA is now poised to become the premier hub in Africa.” said Kenya Airports Authority Managing Director, Jonny Andersen. 

This comes after the meeting between President Uhuru Kenyatta and his US counterpart Donald Trump at the White House in Washington DC.  

Did Tanzania falsify its GDP data?

President Magufuli of Tanzania(R).
Heavy-handedness paying off?

TANZANIA's economic growth, which slowed down in the first half of last year compared to previously, could be revised down after weaknesses in the compilation of national accounts data are addressed, the International Monetary Fund (IMF) has revealed.

Economic growth was subdued in the first half of last year compared to previously, raising concern among some opposition politicians about the direction of the national economy.

 But the IMF now reckons that an ongoing review of the government's method of computing the gross domestic product (GDP) figure, will likely reveal that the economy actually grew at a slower speed than the already reported 6.8 percent in H1 2017.

 The IMF said in a new report that its East Africa Regional Technical Assistance Centre (East AFRITAC) is currently working with the state-run National Bureau of Statistics (NBS) to help review the GDP growth figures.

 "The East AFRITAC is assisting the authorities in addressing weaknesses in national accounts’ compilation, which is likely to lead to downward revisions to the published growth number for the first half of 2017," IMF said in its latest 55-page country report for Tanzania released this week.

 The officially published GDP growth figure for the first half of 2017 is 6.8 per cent, down from 7.7 percent in H1 2016.

 However, the IMF warned that a review of data compilation for the national economy will probably reveal that the economy grew at a slower speed than the reported 6.8 per cent in the first half of last year.

"A decline in private sector credit, a sharp increase in non-performing loan (NPL) ratios, and weaknesses in tax revenue collections would suggest a deceleration in economic growth," it said.

 The IMF said Tanzania's economy, which has been growing at around 7 per cent annually over the past decade, will now probably miss its GDP growth targets.

 "Based on recent developments of the leading indicators of economic activities in the first half of 2017, the (government’s) targeted growth rate has been revised downwards to 7.0 per cent against the initial estimate of 7.1 percent," it said.

 The World Bank said in November last year that Tanzania’s full-year GDP growth would likely decline to 6.6 percent in 2017 versus the government’s revised growth target of 7.0 percent.

 The IMF said in its report that while Tanzania's economy grew at around 7.0 percent in fiscal year 2015/16, GDP growth will likely slow down to 6.0 percent in 2016/17.

According to IMF projections, Tanzania’s GDP growth will likely grow by 6.2 percent in 2017/18, followed by 6.5 percent (2018/19), 6.8 percent (2019/20) and 6.7 percent (2020/21).

 

“HEAVY-HANDEDNESS”

  "The deteriorated perceptions regarding the business climate may become a drag on economic activity by failing to unlock new investment opportunities and deterring private sector participation in the major infrastructure projects," the IMF warned.

A decline in investor confidence in Tanzania over the past two years due to the uncertainty of government policies was hurting the economy, said the fund.

"Some recent events have increased private sector concerns about heavy-handed and arbitrary enforcement of rules, increasing uncertainty and negatively affecting private investment," the IMF noted.

 "These include, for example, an export ban on mineral concentrates, heavy-handed changes to the mining laws and the delayed repayment of value-added tax (VAT) refunds."

 According to the IMF, only 58 billion/- in VAT refunds were paid in 2016/17, compared with a staggering 570 billion/- paid in 2015/16 due to "broad and protracted audits of related claims."

"A continued low rate of execution of public infrastructure spending would have a negative impact on economic activity in the near term and reduce the growth potential going forward," it said.

 "Additionally, a prolonged slowdown in private sector credit growth could affect economic activity."

The IMF said the fundamentals of Tanzania's economy remain robust, but the government needs to urgently address warning signs from key economic indicators.

"Although GDP data point to continued strong growth, other high-frequency data suggest a weakening economic activity. Tax revenue collections are lower than expected and credit growth has stagnated reflecting in part banks’ rising NPLs. Inflation remains moderate, and international reserves have increased substantially," it said.

"Strong growth and job creation are needed to address high poverty and a large underemployed youth population. Infrastructure gaps and the business climate have also become increasingly challenging and require a response. Sustained reforms will be needed to achieve the strong private sector-led growth envisioned by the government’s development plan."

Additional domestic revenue needs to be mobilised through tax policy and administration reforms while improving the functioning of the VAT refunds system, said the IMF.

Despite forecasts from both the IMF and the World Bank of slowing GDP growth in Tanzania, the government remains bullish that it will meet its revised 7.0 percent economic growth target for 2017.

The Minister for Finance and Planning, Dr Philip Mpango, said last month that Tanzania remained one of the fastest-growing economies in Africa, driven by construction, transport, communication and financial services sectors.
From the Sunday Guardian

KQ to fly to direct New York from October

   

Kenya Airways will begin daily flights between Nairobi and New York in October. The flight will cut 7 hours of travel between the two cities.

Those keen top travel in October on the maiden flight can now start buying tickets whose sale begins on Thursday. Kenya Airways has already secured a landing slot at JFK.

The trans-Atlantic flights, scheduled to depart Jomo Kenyatta International Airport (JKIA) at 10:30pm every day, will last 15 hours arriving at JFK Airport at 6.30 am EAT. The return flight will depart JFK at 1: 30 PM landing in Nairobi at 10.30 am the next day.

Passengers traveling to JFK will arrive at 6:30am, in time for morning meetings, while the return flight from JFK will depart at 1:30pm and arrive in Nairobi at 10:30am the next day.

Each flight has a capacity of 234 passengers – 204 in Economy and the rest in Business Class of the national carrier’s Dreamliner aircraft.

Kenya Airways, known in short as KQ, has shelved plans to operate the flights through a code-share partnership with US carrier Delta Airlines, its SkyTeam partner.

Delta and three other airlines - Virgin Atlantic and KLM Air France- are currently involved in lengthy merger forcing Kenya Airways to go it alone for now.

 KQ could add another flight to the US through West Africa, once the merger between her code-share partners is over.

 For the Kenya government which has worked hard for the direct flights, it’s a sigh of relief. Phew it’s over! The government expects the direct flights to boost exports to the US and help jumpstart the tourism sector. An estimated100,000 Americans visit Kenya each year.

Also read http://eaers.blogspot.co.ke/2014/07/how-soon-kqs-direct-flights-to-us.html

Construction of Bagamoyo Port begins in 2015

Construction of a Chinese-funded port and special economic zone in Tanzania worth at least $10 billion will start in July 2015, the president's office said in a statement on Monday, for the first time setting a start date for the delayed initiative.

 The construction of Bagamoyo Port begins in July 2015. The proposed port is locatedat Bagamoyo, 75 km (47 miles) north of commercial capital Dar es Salaam.

A construction agreement for the port and associated zone was signed on Sunday and follows a framework deal signed last year. An official said a start date for building work had taken time to set because of other negotiations about infrastructure to link the port to national transport networks.

The planned Bagamoyo port, new investment in Dar es Salaam and other spending on roads and railways are part of Tanzania's efforts to become a transport hub that could challenge the dominance of Mombasa in neighbouring Kenya.

"The Tanzanian government signed a memorandum of understanding with two major international institutions ... to develop the Bagamoyo economic zone," Tanzania's presidency said in a statement, adding construction would start on July 1 next year.

Tanzania said it signed the infrastructure development agreement with port developer China Merchant Holding International (CMHI) and Oman's biggest sovereign wealth fund, the State General Reserve Fund (SGRF).

Tanzanian President Jakaya Kikwete witnessed the signing of the agreement in Shenzhen, southern China.

A framework agreement between Tanzania and the Chinese port operator was signed when Chinese President Xi Jinping's visited the African nation in March 2013.

Li Jianhong, executive chairman of China Merchants Holdings, asked Tanzania's government at the signing of the construction contract to remove obstacles that have delayed implementation.

"We will do everything possible to ensure that this project takes off because it will bring enormous economic benefits to the entire country," President Kikwete said in the statement.

Separately, Tanzania and China on Oct. 24 signed deals with Chinese firms worth more than $1.7 billion, including one to build a satellite city to ease congestion in Dar es Salaam, deepening Beijing's ties with east Africa.

China, which built a railway linking Tanzania and Zambia in the 1960s and 1970s, is financing a $1.2 billion, 532 km (330 mile) natural gas pipeline. China's Sichuan Hongda Co Ltd in 2011 signed a $3 billion deal with Tanzania to mine coal and iron ore

East Africa neighbours close to picking consultant for oil export pipeline

KENYA, UGANDA and Rwanda are in the final stages of deciding on a consultant to oversee building a pipeline to pump the region's new oil bonanza to the coast for export, a senior Kenyan energy ministry officials said on Thursday.

In June, the three countries invited bids for a consultant to oversee a feasibility study and initial design for the construction of a 1,300-km (808-mile) oil pipeline to transport crude to the Kenyan coast.

"We are in the final stage of negotiating with the consultant who will do a feasibility study and the front end engineering design for a crude oil pipeline which should run from Hoima to coastal region of this country," Joseph Njoroge, principal secretary at the Ministry Energy and Petroleum told an east African oil and gas conference.

"Very soon, early next month," Martin Heya, commissioner of petroleum at the same ministry said of the award timing.

Njoroge said the consultant would be required finish the study within five months of the award.

In addition to the pipeline, the consultant would be required to supervise the construction of a fibre optic cable from Hoima in Uganda through the Lokichar basin in northwest Kenya to Lamu, and tank terminals in Hoima, Lokichar and Lamu.

The project will also involve the construction of a 9-km pipeline from the Lamu tank terminal to an offshore mooring buoys.

Kenya's energy ministry said earlier this year the aim of having a single consultant for the whole project was to ensure consistency in the quality of the whole pipeline.

East Africa has become potentially lucrative for international oil firms after Kenya and Uganda's commercial oil finds and discoveries of gas off the coast of Tanzania and Mozambique.

Tullow Oil and Africa Oil, which control blocks in Kenya, have estimated discoveries in the South Lokichar basin at 600 million barrels, a level experts say is enough to make a pipeline viable even without Uganda.

In neighbouring Uganda, the government estimates its crude reserves at 6.5 billion barrels.

Njoroge put the estimated crude oil recoverable reserves at about 1 billion barrels from the tertiary Rift Valley Basin, and about 1 trillion cubic standard feet of natural gas in the Anza Basin, and about 750 billion cubic feet of gas in the Lamu Basin, all in Kenya.

 By Reuters

The corrupt fuel violence in Kenya

CORRUPT businessmen and politicians have been fanning insecurity in Kenya. They use violence as a red herring to divert attention from corruption to insecurity in a bid to cover their trucks or to blackmail the government into stopping criminal investigations. A case in point is the violence in Lamu County in June and July this year.

 Corrupt characters had grabbed huge tracts of land- to be precise- some 500,000 acres of public land.  The land covers much of the area set aside for the proposed   US$23 billion Lamu Port-South Sudan - Ethiopia transport corridor, LAPSSET.  The land is public land occupied by squatters. The grabbers therefore hired goons- who pretended to be Al-shabaab militants- to violently evict them.

This opened a Pandora’s Box.  Investigations into the cause of the violence unearthed the scandal.  The land grab was executed by 22 entities that grabbed 500,000 acres in 2011/2012. It is note worth that that was the period immediately preceding the general election in Kenya in 2013. Kenya’s President Uhuru Kenyatta pulled fast and bold one on the avaricious:  He shocked the nation by announcing that just a group of 22 entities, had grabbed some 500, 000 acres of public land in Lamu County. The president ordered the repossession of the land and also investigation with a view to prosecuting the culprits.

The presidential announcement solved a paradox: Lamu is a sparsely populated County, where population density is just sixteen per square Kilometre: Why does the region suffer landlessness and violence related to land ownership?  Now 500,000acres of land measures some 2000 square kilometres. This is enough land to accommodate some 32,000 people.  This means that the 22 well-healed land grabbers displaced some 32,000 people.

The land is a prime piece of real estate considering that it borders the site of the proposed US$25 billion Lamu Port south Sudan Ethiopia transport (LAPSSET) corridor. This corridor’s developments include the Lamu Mega Port on 9000 hectares of land, a 2000km high speed Railway line, a Crude Oil pipeline, a120, 000bpd Crude oil refinery, a highway  a resort city and an economic zone.

 The Port will also be at the head of the equatorial bridge, a Railway line connecting Lamu Port on the Indian Ocean to Douala port in Cameroun on the Atlantic Coast. This makes the land a real gold hence a prime target for grabbing.  LAPSSET will turn the backwater Lamu County into a bustling energy and logistics hub in east Africa thus increasing demand for land and consequently pushing up its price.

Construction of the first three berths begins in the 32-berth port was proposed to begin this month hence the urgency to evict the squatters.  At least 100 people were slaughtered in an orgy of violence lasting about three weekends.

 The predators according to intelligence reports were business men and politicians from both the coast and up country.  A majority appears to be members or supporters of the opposition party, ODM, which is an affiliate of the CORD coalition, the official opposition party in Kenya. One of the kingpins of the opposition, Siaya senator James Orengo was the Minister in charge of Lands in 2011/2012 when the land was dished out.  Orengo is a Member of the Opposition CORD coalition led by Raila Odinga who was the Prime Minster in the last coalition government.  He and Orengo are also at the fore front of change the Constitution Movement. Ironically, among the issues they want voted for is Corruption and insecurity. He has already recorded a statement with the Police over the land grab.

 The corrupt are adept creating smokescreens and red herring s to cover up its shenanigans. For instance, when the violence broke out in Mpeketoni in Mid- June, the government blamed local political networks.  The opposition led by Raila Odinga, stopped short of calling the President an idiot insisting that the violence is perpetuated by the Somali militant group-Al- Shabaab. Interestingly, the Somalia based Al-shabaab militants “claimed responsibility for the carnage.”  However, a person suspected to be an ODM supporter, was later arrested for using a fake Al-shabaab twitter account to issue the said admission.

 The admission by Al-shabaab was puzzling; the Militants are under siege, nay on the run, in Somalia.  Few thought they have the stomach to attack targets across the borders.   The land scandal has blown the cover on the avaricious in Kenya.

A part from displacing people from their land and therefore their daily economic activities, the violence has devastated the tourism sector.

The coastal economy is largely depended on tourism.  The sector, which was just emerging from bad business caused by uncertainties associated with last year’s elections, is now back in the doldrums. Travel advisories by western source markets have emptied the white sandy beaches of tourists.

The industry employs some 500,000 people directly and millions others indirectly.  These jobs are at stake.  Hotels have already declared a significant proportion of these employees redundant.  The national economic growth rate which is forecast at 5.5 to per cent this year is also threatened. The crisis in the tourism sector could shave off up to one per cent off the forecast growth. Last year, the decline in tourist numbers shaved off 0.7 per cent of economic growth.

It is perhaps this realisation that informed the bold move by the government to cancel the title deeds and repossess the land. In addition, to stop the bloodletting and hemorrhage of the economy, the government sent the military to hunt down the criminals with a devastating effect.

Intelligence reports indicate that a large number of the criminals were killed in security forces’ raids on their hideout in the expansive Boni forest. If government sustains its aggressive stance on crime, insecurity will decline. In fact, in august, insecurity was down significantly.

East Africa’s EOI for Pipeline extension

Kenya, Uganda and Rwanda have invited EOI (Expression Of Interest) to build a 784-kilometre pipeline to transport while petroleum products. The project, to be built in in two phases will transport refined petroleum products from Kenya to both Uganda and Rwanda.

A

The project, part of east African regional integration plans, involves extending an existing pipeline that runs from the Kenyan port of Mombasa and the western town of Eldoret.

The extension will link that pipeline to Kampala and Kigali and also serve markets in Tanzania, Burundi, South Sudan and the Democratic Republic of Congo. Products now have to be trucked by road.

Uganda and Kenya have discovered commercial quantities of oil and plan to start production in about three years. Those finds are among a series of discoveries along Africa's eastern coast and Rift Valley which runs through Kenya and other states.

As well as exporting crude, Uganda plans to refine some oil, making products that could flow through the pipeline extension. Plans include modifying the existing pipeline, which pumps products from the coast inland, so products can flow both ways.

 Interested parties should submit the bids by Sept. 30.

 The advertisement does not have a price tag. However, previously the tag was estimated at $300 million.

The existing products pipeline is owned and operated by the state-run Kenya Pipeline Company (KPC).

The extension would be built in two phases, comprising a 350-km stretch between Eldoret and Kampala and a 434-km pipeline between the Ugandan capital to Kigali.  It also includes construction of storage terminal at Kampala, Mbarara and Kigali.

Separate to the products pipeline, Kenya, Uganda and Rwanda invited bids in June for a consultant to oversee a feasibility study and initial design for a 1,300-kilometre oil export pipeline to the Kenyan coast. 

EOI call for Kenya's oil jetty

Kenya's National Oil Corp has floated an EOI for a project adviser  for a new oil jetty in the port city of Mombasa.

 The tendedr, published on Monday, NOCK invites firms to submit expressions of interest by Sept. 29 to act as adviser for the Public Private Partnership (PPP) project.

"The successful candidate will  review the original feasibility study to cater for the oil discoveries which have made Kenya a potential oil exporter.

 The initial plans unveiled in 2012 for the oil jetty, or single buoy mooring, and storage facilities were pushed back to change the scope and design after oil was found in Kenya. The initial plan was to cost some US$500 million.

"We originally envisaged to work with a specific jetty design as a net importer of oil but that changed because of the discovery of oil deposits in Kenya in 2012," NOCK spokesman Temesi Mukani  told Reuters.

The tender document said the project aimed to ensure the port was more efficient, cut delays and made Kenya's coast a competitive choice for oil tankers. Another objective is to "provide the infrastructure that will support east African states to export their discoveries to global markets".

The main export route discussed up until now for Kenyan and Ugandan oil, both still a few years from major production, would be via a planned pipeline in north Kenya to a new port at Lamu.
Kenya is under pressure to boost storage facilities and develop a strategic reserve to stabilise petroleum supplies. The country has no strategic reserves and relies on oil marketers' 21-day reserves required under industry regulations.

Crude has also been found in next door Uganda, part of a string of hydrocarbons finds along Africa's east coast and the Rift Valley that passes through Kenya and neighbouring states.

Fuel prices have a big impact on inflation in the east African nation, which relies heavily on diesel for transport, power generation and agriculture, while kerosene is used in many households for cooking and lighting.

Kenya Bourse's IPO oversubscribed

NAIROBI, Sept 3 (Reuters) - The Nairobi Securities Exchange (NSE) has raised 627 million Kenyan shillings ($7.1 million) for expansion in an oversubscribed initial public offering as part of plans to demutualise the bourse.

Demutualisation is seen as a way of curbing the influence stockbrokers have over the exchange's management, which has been criticised for reacting slowly to breaches in regulations.

The funds raised will be used to develop new products such as derivatives, exchange-traded funds and Sharia-compliant indexes, NSE Chief Executive Peter Mwangi said in a statement late on Tuesday.

The completion of the IPO makes the NSE the second African exchange after the Johannesburg Stock Exchange to be demutualised and transition from a private, mutual company to a public, listed company.

The NSE had said it was seeking to raise 627 million shillings by selling up to 66 million new shares at a price of 9.50 shillings per share. Investors applied for 504,189,700 new shares worth 4.8 billion shillings garnering a subscription of 764 percent, and an over subscription of 664 percent.

The new shareholders will be able to trade their NSE shares next Tuesday, the NSE said.

Following the listing - planned since 2005 - the NSE shares will trade like any other company on the bourse.

Reuters

Uganda Lifts Oil Reserves

UGANDA has revised upwards  to 6.5 billion barrels after an appraisal that also showed commercial deposits of natural gas, officials said.

The east African country discovered commercial hydrocarbon deposits in the Albertine rift basin that straddles its border with the Democratic Republic of Congo in 2006.

Production has been repeatedly delayed since then by contractual disagreements, tax disputes and infrastructure setbacks and is now expected from 2017.

In a speech seen by Reuters on Friday, Ernest Rubondo commissioner for the energy ministry's Petroleum Exploration and Production Department, said only 40 percent of the basin had been explored so far and that estimated recoverable oil stood at 1.4 billion barrels.

Production of the discovered oil could last 20 to 30 years, and even more oil could be found, Rubondo said.

"Since additional exploration and appraisal is expected ... this could lead to additional resources being discovered in the country, hence prolonging the production period," Rubondo said.

Rubondo said Uganda was preparing for "open competitive licensing rounds" for the remaining acreage in the basin, but did not yet have a time frame for the process.

Ugandan officials say they aim to get better terms from explorers in future oil deals now that the country's exploration risk has been diminished by the discovery of more commercially viable oil deposits.

In a separate statement, the energy ministry said on Friday that the country had some 500 billion cubic feet of natural gas.

Ugandan oil officials have long suspected the presence of gas traces, but on Friday they confirmed publicly for the first time the existence of commercial natural gas deposits.

East Africa has been a focus of hydrocarbon exploration after substantial crude oil deposits were found in Kenya, although commercial viability has yet to be established. Major gas reserves have been discovered in Tanzania and Mozambique.

London-listed Tullow Oil, France's Total SA and CNOOC of China, are exploring for oil in Uganda. Tullow has estimated Uganda could earn up to $50 billion from its oil reserves. 

America's scramble for Africa

"Engaging with Africa not as a choice, but as a necessity,"

 The Obama administration on Tuesday pushed for Congress to renew a 14-year-old trade program giving African countries duty-free access to U.S. markets, warning that allowing the program to expire would disrupt trade flows between the two regions.

U.S. Trade Representative Michael Froman said the African Growth Opportunity Act, or AGOA, which expires on Sept. 30 next year had both benefited African countries and supported 120,000 U.S. jobs.

Froman's remarks came just days before the White House is set to host 50 African leaders at a three-day U.S.-Africa summit aimed at strengthening relations. AGOA, which is at the heart of U.S.-Africa trade ties, will be a key issue.

Enacted in 2000, AGOA gives about 7,000 products from sub-Saharan African countries access to U.S. markets free of import duty. Nearly 40 African countries are eligible to take part.

"Given that Africa is home to the world's fastest growing middle class and six out of 10 of the fastest growing economies in 2014, it's easy to see why companies like General Electric Co, Caterpillar Inc and Procter & Gamble Co increasingly view engaging with Africa not as a choice, but as a necessity," Froman said.

The head of the House Ways and Means trade subcommittee, Devin Nunes, told reporters Congress could package AGOA renewal together with fast-track power for trade negotiations, or trade promotion authority (TPA), and other outstanding trade issues.

"We have so many of these trade issues that are basically standing behind TPA, we have got to get TPA first," he said.

Exports from sub-Saharan Africa to the United States under AGOA and other trade preferences totaled $26.8 billion in 2013, according to USTR data. Most of those exports were petroleum products; non-oil goods accounted for just $4.9 billion.

"That is still relatively modest and we want to see that grow," Froman said at an event sponsored by the Brookings Institution.

The trade program has been criticized for disproportionately benefiting certain industries and a handful of countries, including Nigeria, South Africa and Angola.

Some African leaders have also said their countries lack the skilled labor and infrastructure to take advantage of it. Several African countries, for instance, are plagued with poor roads and shortages of electricity, which leads to power rationing that interrupts manufacturing.

Froman said the Obama administration plans to address AGOA's shortcomings and expand access to the program while also holding eligible countries more accountable. His office wants Congress to renew the program in advance.

Lawmakers will likely demand overhauls to the program, including making it more 

reciprocal so the United States can enjoy open access to African markets.

"The specific parameters of AGOA, of course, are ultimately a prerogative of Congress, and we look forward to working with them to put in place a program that reflects the reality of Africa's rise," Froman said.

Reuters

Tullow to Conduct Extensive Appraisal Drilling and Testing for Oil Production in Kenya

British firm, Tullow Oil Plc, says it will conduct extensive appraisal drilling and testing throughout year 2014 and 2015.

The objective of the extensive appraisal drilling and testing is to finalize a commercial production development report.

This report is what the government of Kenya wants. Nairobi wants to start selling oil as early as 2016 or 2017 and Tullow Plc must provide a comprehensive development report.

Speaking in Nairobi, Robin Sutherland, Tullow Oil Plc exploration manager for Sub Saharan Africa said the company is expected to submit a field development plan to the government of Kenya in the fourth quarter of 2015.

“We are expecting to submit our field development plans to the government in the fourth quarter of 2015,” Robin Sutherland told an oil and gas conference in Nairobi.

The appraisal drilling and testing will quantify the commercial viability thresholds; enable both the government and the investors to make projections.

Source:.intelligencebriefs.com/

  

Kenya's Airport financiers named

The prototype of the new terminal

Kenya’s government is in talks with four companies, including Standard Bank Group Ltd. (SBK), Africa’s biggest lender, about funding the construction of a $653 million Green field airport terminal, the Kenya Airports Authority said.

The state is in discussions with the African Development Bank, China Development Bank Corp. and Sunnyvale, California-based AAE Systems Inc. about funding 85 percent of the project cost, Managing Director Lucy Mbugua told reporters today in the capital, Nairobi. The first phase of construction of the new terminal in Nairobi will begin in July and is expected to end in 2017, she said.

“They have already given us their terms and we are in discussion,” Mbugua said.

Kenya is expanding its Jomo Kenyatta International Airport as it seeks to boost arrivals of tourists who are the second-biggest source of foreign-currency earnings in East Africa’s largest economy. The new terminal will have the capacity to handle 20 million passengers a year, compared with the 7 million that the existing terminal, built in 1978, can process.

From Bloomberg

Six DreamLiners for Kenya Airways this year

The Pride of Africa

Kenya Airways will take delivery of its first Boeing 787 on April 4, marking the first of six of the type to join its fleet in 2014.

Nairobi-based Kenya Airways said the new additions, which also include a 777-300ER slated for delivery in May, form a key part of its Project Mawingu 10-year growth strategy.

The aircraft will be used as part of a “deliberate effort” to step up Kenya Airways’ long-haul capacity, allowing the carrier to increase its number of direct flights, and add new destinations and frequencies.

“Routes to Paris, Amsterdam and Beijing are among the destinations earmarked for direct flights, as we continue exploring new markets that will be instrumental in helping us achieve our objective, to contribute toward the sustainable development of Africa,” Kenya Airways CEO Titus Naikuni said.

Kenya Airways also recently confirmed plans to launch new budget carrier Jambo Jet on April 1.

Kenya to call or EOI on crude pipelin

An oil Pipeline. Pipedream turns reality?

KENYA will soon float an EOI for the design and construction of a crude oil pipeline from Turkana to the proposed Port of Lamu. Although the ownership of the project is yet to be decided, the government appears to be thinking a PPP.

Available information seems to suggest that the government could be looking at a DBFO. The cabinet Secretary in charge of Energy in Kenya has indicated that the government will expect prospective investors to submit engineering, procurement and construction (EPC) models as well as their financing arrangements.

The US$3 billion pipeline was initially conceived to transport crude oil from South Sudan to the port of Lamu. That was before Kenya discovered oil in 2013. Now that Kenya has discovered commercial quantities, she is set take the lead in the development of the pipeline. South Sudan is stumbling from one crisis to the next which could slam the breaks on the country’s development agenda. South Sudan for all intends and purpose is going to be a passenger on the project.

Toyota Tshusho, the investment arm of Japan Toyota Motor Corporation had tendered a US$3 billion bid to build the Pipeline with an option to extend it to Uganda for a total cost of $5 billion.  It is not clear what become of that unsolicited bid. However, her preliminary designs for the project, with several components in addition to the pipeline including a 120,000bpd refinery at Lamu. That could stand her a good stead in future bids.

Kenya’s oil finds have reached commercial thresholds. Consequently, it was time the country started preparing infrastructure ahead of commercial production, hopefully in three years.

So far Kenya’s oil wealth is estimated at 600 million barrels out of seven wells. Exploration is still going on and more crude is likely to be discovered.

The plans by the ministry of Energy and Petroleum got a boost after Uganda signed a memorandum of understanding with Britain’s Tullow Oil, France’s Total and China’s CNOOC last week in a significant step towards launching oil production in the country. Uganda is also looking at exporting her crude oil through the LAPSSET corridor, that is the Lamu port.

A development plan prepared by the Energy ministry shows that production is likely to begin during the 2016/7 financial year.

The pipeline is on the Lamu port, South Sudan, Ethiopia transport corridor (LAPSSET). Consequently, it is expected to be extended to South Sudan, and Ethiopia. Although it is not clear the distance of pipeline in Kenya, the initial proposal placed the distance at 2000 km from Juba to Lamu.  

Tanzania’s US$30bn Power gap

03 February, 2014 06:28:00

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 Reports indicate that Tanzania's energy infrastructure will require a new investment of almost $3 billion annually for the period of 10 years to meet its power supply demand.

The figure was revealed during the Powering Africa Tanzania symposium, a gathering that brings together key public and private sector energy stakeholders.

The African Development Bank's Chief of Power Engineer, Dr Babu Ram, says Tanzania has a massive infrastructure gap and it’s getting worse every day.

Dr. Ram believes that spending at the increased level would absorb just over 20% of the country's GDP. On average, African countries are spending only 40% on infrastructure.

@AfricanBJournal

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.