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.

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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.