WATTS UP MAGAZINE

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THE ENERGY MAGAZINE

E.75

JULY - SEP 2019

0 792382 363308 >

STRINGING EAST AFRICA FCPA FERNANDES BARASA KETRACO CEO A WOMAN OF BEAUTIFUL DREAMS - Hon. Irene Muloni, Min. for Energy & Minerals Uganda

THE NUCLEAR OPTION AS DROUGHTS RAVAGE AFRICA

SPECIAL FEATURE

Ten years of Stringing... - KETRACO

GENERATION Z Couldn’t be bothered?


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FROM THE

EDITOR

THE TEAM Publisher & CEO

James Ngomeli

I am pleased to present the July – September 2019 issue of Watts Up Energy magazine. For those reading us for the first time, thank you for joining us in issue no. 10

Editor

Stella Muhoro

Creative & Layout Kelvin Mabonga

Contributors

1.Cynthia Wanjiru 2. Andrew Bauer 3. David Njagi 4. Greg Coleman 5. Laura Nashipae Lepore 6. Dana Ullman 7. Cliff Osoro 8. Thomson Reuters Foundation

Publishing Company Brands & Beyond Ltd

Views & opinions expressed in this magazine are not necessarily those of Brands & Beyond Ltd, its publisher and /or its editors. We at Brands and Beyond Ltd. do our best to verify the information published, but do not take any responsibility for the absolute accuracy of the information. Brands and Beyond Ltd. does not accept any responsibility for any investment or other decision taken by readers on the basis of information provided herein.

SOCIAL MEDIA

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Download Wattsup magazine application on PlayStore or AppleStore

We welcome our readers to the quarter’s July – September edition as we continue to spread awareness on sustainable values in business and explore how organizations continue dealing with challenges while championing for sustainability. In this issue, we take an in-depth look at KETRACO’s milestones as it celebrates its 10 year anniversary. We were honored to get inside their command center and meet the players behind this great achievement. The organization has grown its asset base to over Kshs.200Billion and positioned itself as the future National System Controller and East Africa’s Power Pool Interconnector. Our readers can enjoy reading their never been told before journey on how they are honoring the past while welcoming the future. We were pleased to interview Uganda’s Minister for Energy and Minerals. We had a candid discussion on her career and opportunities in the energy sector in Uganda. We have also covered insightful events such as ‘The Great Energy Debate’ series and detailed inspiring words of women transforming the energy sector. We have delved deep into the financing risks in oil and gas projects, that are impeding the sector’s growth in East Africa. Both the Petroleum and Energy Acts of 2019 have brought a sense of normalcy in the sectors. With the appropriate regulatory landscape, more investor opportunities will be unlocked resulting in the creation of jobs. We strive to interrogate the “why” behind major decisions and breaking news in the energy sector, and get public views on key issues. We have gone the extra mile to give you the best in the world of energy. Send us your thoughts on how we can become even better and what you would like to see covered in the future. Welcome on board!

JAMES NGOMELI

CHIEF ENERGIZING OFFICER


Contents

42

56

36

10

Drone-dropping Costs

52

Kenya’s position in East Africa’s Energy Future

40

Turkana’s Low Hanging Dollars

20

Ketraco’s Ten Year Journey

51

Energy Conservation Should be Everyone’s Concern

08

Pitfalls to avoid in Kenya’s quest for a Sovereign Wealth Fund


Contents

12

30 16

44

54

When Coal comes to Paradise

30

Inside Kenya’s Waste-to-Energy Plant

44

Key risks in African oil & gas projects’ financing

47

Africa seeks nuclear power as droughts hamper continent-wide electrification goal

29

Women in Energy: I Believe

18

‘Great Energy Debate’ series


SUSTAINABILITY NEWS

The

ZeroCarbon Race

From an open office plan to a waste water recycling system, Mars Wrigley hopes to hit its no-carbon target by 2040, writes Clifford Akumu.

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t the Mars Wrigley’s confectionery premises in Athi River, Machakos County, an open plan office set up greets you. Noticeably, no lights are on in the offices. The clear sky and the sun rays beaming through the huge wall-to-wall windows are letting in plenty of light. At the far end of the open office, recycle bins are clearly labelled to aid the employees in disposing off their coffee cups, left over snacks, serviettes and other forms of waste. A few meters away in the production building, cooling towers that use energy from the factory’s treated wastewater roar to life. The ‘green plant’ is a beehive of activity. As we proceed on a tour of the newly built plant, one can’t help but notice the strong focus on energy efficiency through its unique form and design. The building is rightly earning its

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Mars Wrigley Adminstration block iconic status in the Machakos landscape, especially with its eye-catching indoor lighting during the day making it a work haven and a healthier space for staff. Sustainable development is embedded in the gum-maker’s ethos. Energy and water conservation are key elements of Mars Wrigley’s sustainability strategy. A fairly complex concept, sustainability encompasses many issues ranging from energy and water supply, air quality, workers’ health to social eq- “Our focus on uity. sustainabiliGreen technologies A study conducted by the Kenya Green Building Society in 2018 dubbed, ‘Green Buildings and Communities: Costs and Benefits’, noted that embracing green technologies could help developers save energy by as much as 30 to 60 per cent. The plan is taking shape. Vivian Muduray, factory director at Mars Wrigley says the company is seeking to cut its fossil fuel energy use and greenhouse gas emissions to zero by 2040. In the last three to four years, the company has been able to reduce its carbon footprint to 27 per cent across the globe.

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ty is not just because it is the right thing to do for the planet and its people, but becaus is also the right thing to do for business”


SUSTAINABILITY NEWS

The world we want tomorrow starts with how we do business today” - Vivian Muduray, factory director at Mars Wrigley

“We are beginning to see the outcomes of investing in energy efficient building and waste management,” says Muduray. “The world we want tomorrow starts with how we do business today” Global recognition Reducing the impact of greenhouse gas emission on the environment by embracing green building strategies and practices in design and construction has paid off for the manufacturer. In February this year, the facility received global certification for green initiatives by Leadership in Energy and Environmental Design (LEED)- a global green building rating system that recognises organisations promoting sustainability in building design, construction and operation. It is no mean feat. To receive LEED Certification, projects pursue credits that earn points based on their green building strategies and practices. The Kshs.7Billion facility was awarded 62 points earning it LEED GOLD certification status. Save the planet The ‘Juicy Fruit’ maker increased outdoor air supply rates by 30 per cent more than the ASHRAE 62.1 standard in both the administration and production buildings. Water efficiency was achieved by reducing municipal water usage by more than 40 percent over the current baseline. And high albedo roof surfaces installed in both buildings, resulted in a Solar Reflectance Index(SRI)value of 93, shy of the standard white surface which is 100. This SRI value makes the roof be classified as ‘cool roof ’.

“With sustainability, we not only look at production in the factory, but all activities that affect our supply and value chain. Our focus on sustainability is not just because it is the right thing to do for the planet and its people, but because is also the right thing to do for business,” says Lennox Yieke, the company’s Corporate Affairs Manager for East Africa. Waste water for irrigation The factory’s wastewater treatment plant recycles all of the water that is used in the cooling tower, which is then used for irrigation purposes. This helps to prevent contamination of rivers. It has also led to reduction of water usage to about 40 per cent at the plant. “We are located in a water-scarce county. We have helped the county to supply water to other stakeholders by easing up the pressure through innovative ways,” explains Yieke. “If we can produce no waste, that is ideal,” he adds. But the little waste that the factory produces is put into good use by making fertilizer, briquettes and animal feeds.E

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THE LAW

Pitfalls to avoid in Kenya’s quest for a Sovereign Wealth Fund By Andrew Bauer Natural Resource Governance Institute

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n February, Kenya’s government released a draft law that would establish a new sovereign wealth fund. The fund would divide the nation’s petroleum and mineral revenues to three “components”: one for savings, one for budget stabilization and one for domestic spending and investment. Kenya’s expected non-renewable resource revenues are modest, both in absolute terms and relative to general government revenues. Based on independent estimates, petroleum revenues are unlikely to exceed 5 per cent of fiscal revenues, even at peak production (estimated to be in 2022 at the earliest). Mineral revenues totalled USD 16.5 million last year, a drop in the ocean in terms of government revenue. Still, the proposal incorporates many of the key elements in sovereign wealth fund bills that promote effective, accountable and transparent management of natural resource revenues. Among the strongest of these are clear fund objectives, clear deposit rules, significant public disclosure requirements and open, competitive

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and transparent selection of external managers. At the same time, the draft law introduces risks to public money that did not previously exist. We highlight five of the risks here. Excessive risk-taking While the draft incorporates constraints on some types of asset purchases, it permits investment in the riskiest asset classes, such as derivatives, private market instruments and commodities. This is mainly due to three clauses in Schedule 2 of the draft. These allow the cabinet secretary (the equivalent of a minister of finance appointed by the president) to prescribe “any other instrument” as a qualifying instrument for the fund. It would be prudent to tighten the restrictions on purchases of highly risky assets, which are unnecessary for high long-run returns and susceptible to corruption and high management fees, as has been the case recently in Angola, Libya and Malaysia.

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Inadequate independence and oversight The draft concentrates significant powers over fund management in the hands of the executive. All board members are either directly or indirectly nominated by the office of the president, as is the sole oversight actor, the auditor-general. While the transparency requirements can act as a safeguard to prevent mismanagement, international experience suggests that transparency is not enough. At least three board members be nominated by non-executive bodies—whether by Parliament or by professional associations—and that Parliament, the Parliamentary Budget Office and an independent external auditor review the fund’s performance on a regular basis. Borrowing while saving In its latest Eurobond issue, the Kenya government was paid 7.25-8.25 per cent annual interest on its sovereign debt. In comparison, the expected long-run rates of return on portfolio investments at moderate risk levels is 3-5 per cent. Until interest rates for Kenyan sovereign debt decline, intergenerational equity objectives would be best served by debt reduction rather than financial savings. Debt repayment should take priority over savings in the early years of oil production. Domestic investment outside the budget process The draft proposes the establishment of an “Infrastructure Development Component” that would absorb 60 per cent of resource revenues. Based on the proposal, this amount can be distributed in two ways: (1) through the budget by allocating it as


THE LAW

part of an Appropriations Act, following best practices in public financial management; or (2) it can remain as a component balance and be invested in Kenyan assets as delineated in Schedule 2(b) Schedule 2 specifically mentions that debt instruments denominated in local currency, securities listed at the Nairobi Securities Exchange, secured bonds and Treasury bill and bonds issued by any of the central banks of the East Africa Community member states are eligible assets. Thus, in theory, the fund could be used to purchase Kenyan debt as well as invest in domestic securities. The domestic investment mandate raises a number of risks, specifically that home financial investment through a sovereign wealth funds could: (1) undermine the public financial management system, creating a less accountable parallel budget with its own appraisal, procurement and monitoring systems; (2) undermine public accountability by bypassing legislative oversight; and (3) lead to poor investment decisions, because financial managers specializing in maximizing financial returns are usually not trained in identifying or managing assets with a social objective in mind. While the need to channel most if not all of Kenya’s natural resource revenues into domestic projects is desirable, the evidence suggests that a sovereign wealth fund may not be the most effective means of making progress. Channeling spending through the normal budget process or establishing

specialized development banks might be more effective options. Should the government maintain Schedule 2 as is, then all domestic asset purchases via the fund should be approved by Parliament in a manner identical to other government domestic investments, e.g. public-private partnerships. Failing to achieve the goals of the fund While the draft proposal provides a list of priorities in determining how to spend oil revenues domestically, the fund can only help achieve fiscal stabilization and sustainable spending objectives if combined with fiscal rules that constrain overall government spending. The Ghanaian experience is pertinent to the Kenyan context. Ghana established sovereign wealth funds in 2011, directing approximately 70 percent of oil revenues toward domestic capital spending and the remaining 30 percent into savings and stabilization. While these allocation rules were generally observed in subsequent years, the overall trends in public finances did not reflect the intent of the law. Spending on recurrent expenditure grew most rapidly as a result of large wage increases, outpacing any

additional capital spending from oil revenues. Ghana’s experience is an important reminder that all revenues are fungible; any measure to control the use of petroleum revenues for one purpose can be offset by decisions related to the rest of the budget. Kenya faces an infrastructure and education financing deficit which can be partly addressed by channeling resource revenues to domestic investment. But a risky fund might leave Kenya worse off than had there been fund at all. E

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INNOVATION

Drones Dropping Costs In Kenya, drones were used for the first time along the 435Km, 400kV Loiyangalani – Suswa line to accelerate stringing and overcome the dangerous environment By Wattsup Team

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he dangerous tasks that our engineers go through cannot be gainsaid. Working with live lines and harsh weather conditions remains a major challenge in the energy sector. The energy sector has adopted the use of drones to carry out this dangerous work, a task they accomplish faster, safer and with an increased level of efficiency. Drones are basically miniature aircrafts with no human pilots on board. Present day, drones have become a useful tool for monitoring projects and continuous inspection of the transmission grid. With safety at the workplace being paramount

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and the pressure on costs unrelenting, drones provide a good way for energy companies to do better. The use of UAVs for transmission grid inspection has been adapted by countries such as Finland, Indonesia, and the United States of America.

Oil and gas pipelines are increasingly being used to transport these precious commodities over long distances at lower cost than trucking. A major industry concern has been the risk of theft and leakage along the pipeline hence the drones are fitted with infrared cameras to detect any challenges.

The term ‘drone’ is no longer synonymous with ‘futuristic’, it is in actual fact here with us.

According to a presentation by KETRACO during the research and innovation conference, the use of UAVs assisted in coverage of the long distances much faster considering the route is via a region with poor roads and is inhabited by wild animals. This is just but a case in point of the ability of drones to create a safer working environment while consuming less time and reducing cost by more than 50%.

Drones do not require that a plant be shut down for inspection as they are able to zoom in while at a safe distance. They therefore save the company down time and also allow the staff to have a visual of the plant in action e.g. in the case of a flaring stack, it would be impossible for staff to inspect it while in action. Drones can also be used to detect a faulty solar panel in large solar farms.

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Drones are not only more reliable, swift and cheaper. Researchers today are coming up with ways of enhancing UAVs, for instance, the use of solar powered drones to counter the challenge of a drone’s short battery life.E


I BELIEVE

Some of the biggest beneficiaries of clean energy are low-income women in rural settings. Women should find ways and means to support rural women to live better lives. And what better way to do this than by driving the agenda in the energy sector!” Pauline Githugu Professional Non-technical Award Winner 2018

The sector has many opportunities for both technical and non-technical skilled women. What a man can do, if given an opportunity a woman does it better. Women should acquire skills that are relevant to the energy sector which is male dominated and reduce the gender gap” Claire Kagga Professional Non-Technical Award Winner 2019

Rhona Lwanga Philanthropy Award Winner 2019

I believe that as women, we are affected the most by the energy plight - the deficits involved, the costs, the inaccessibility and dangers of accessing fuel in any form - so if we joined the sector we would be a very valuable resource in the improvement of the same”

Energy access and particularly renewable energy is playing an increasingly important role in improving the lives of communities living in rural and peri-urban areas, both in developing and developed countries. As such, this is an exciting time for women to participate in shaping a more gender inclusive energy access agenda as they interact the most with energy due to socio-cultural dynamics.” Susan Gathigia Philanthropy Award Winner 2018

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MY BIG 4 AGENDA

FCPA Fernandes Barasa KETRACO CEO 12

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MY BIG 4 AGENDA

Why confidence is my biggest virtue Kenya Electricity Transmission Company Limited (KETRACO) recently completed and energised the 435km, 400kV LoiyangalaniSuswa Line. This, effectively, is the cherry on the birthday cake of 10-year old agency. Over 30 high-voltage transmission lines have been set up so far, two of them: the Mombasa – Nairobi and Suswa- Isinya lines are close to the heart of FCPA Fernandes Barasa, the chief executive who would like to complete his 10-year journey in style. Now in his second term, Barasa says teamwork and belief in his abilities has made it possible to navigate the engineering field. He talked to Watts Up’s Executive Editor JAMES NGOMELI.

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MY BIG 4 AGENDA

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hat are your greatest achievements? Since the incorporation of KETRACO, 49 new and extension substations and 23 transmission lines have been completed. The North Eastern Region was fully connected to the National Grid for the first time in 2016 at Garissa. Garsen, Lamu Town and Lamu Port have been connected since 2014. Towns like Isiolo, Kitale, Kisii, Meru, Sultan Hamud, Mwingi and Galu are now supplied with 132kV high-voltage powered to ensure stable and reliable supply of electricity. What is the Agenda for your second term? I have four major areas I would like to focus on in my next term; First, we are looking at energising all the Counties to ensure they have stable power supply. For example, if you look at a region like Pokot, it is referred to as a county with hidden treasures in regards to the major mining opportunities it has. With stable power supply, it has the potential to be a major investment hub. Another example is Kwale. We have a challenge at the titanium mines and are working to have stable supply of power through the transmission lines. My agenda is to ensure that we deploy high voltage transmission lines in the counties to spur development. Second, we are taking renewable energy and cost-effective power to

Western and Nyanza regions. This pockets in Bungoma, Kericho, Kisumu, Homabay are the areas that do not have enough power and have necessitated the push for geothermal power. We hope to energize the region by the end of the year with Lessos - Kisumu transmission lines. National Systems Operator Number three, we are looking to develop KETRACO as the National Systems Operator. The Energy Act has clearly defined our role in the process of power transmission and development of load dispatch centre in the country. The process to establish the system control function is ongoing with funding already secured for a feasibility study. This will be a milestone for KETRACO. We are positioning KETRACO as a regional hub as we prepare to take up the role of dispatch of power in the country and region. KETRACO will play a critical and enhanced role in the region as a center for exporting and importing power. What is KETRACO’s role in East Africa’s power pool? This is also part of my Big 4 Agenda, to develop regional power system interconnectors. So far, we have energised the Nairobi-Ethiopia line through Suswa which is key in tapping Ethio-

A leader must be ready to take risks for what they feel will benefit the country in the long run.”

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Mining ongoing


MY BIG 4 AGENDA

pia, Djibouti and Sudan in the north. Secondly the Nairobi –Tanzania interconnector through Isinya to Singida in Tanzania will have a huge impact on our operation as it will enable us to sell and cross-sell power to Southern Africa Power Pool (SAPP.) Tanzania is currently extending its lines to Zambia, creating a Kenya –Tanzania –Zambia interconnector. Third, we have the Kenya-Uganda Interconnector 127km 400kv Lessos –Tororo line to Uganda. This will connect the whole of the Eastern Africa region and facilitate regional trade of buying and selling power. This is where the aspect of wheeling charge will apply greatly and boost our operations. We have bought a helicopter through funding from the World Bank that will help in live line maintenance. We are also recruiting engineers who will be undergoing rigorous training in readiness for the line in mid-next year. The issue of wheeling charge as a revenue earner for the maintenance of the transmission line is now very clear. What are some of the biggest challenges you have faced in this role and as an organization? Vandalism This has been a major challenge. For example the Nairobi- Mombasa line was punctured just before the launch which was a setback in our operations. Implentation and integration of the land bill and already existing laws The second challenge has been the implementation of the Land Index Bill implies that you cannot stop the construction of a transmission line. The Way-leaves debacle is another area that has slowed down our projects in the region because of length and complexity of land compensation issues

that arise when we are in the process of implementing projects. What advice can you give leaders especially coming from a non-engineering background? The most critical aspect in providing leadership is gelling teams together to perform. Decisiveness is another virtue. The hallmark of my first term was making firm decisions in critical times. At the peak of pressure to connect the Lake Turkana Wind Project to the Grid, l cancelled the contract of the current firm that was constructing the transmission lines due to non-performance to the dismay of all stakeholders and awarded to another firm to do the work in a record seven months. The firm committed to pay penalties of Ksh 1.2billion per month if they don’t complete the job on time. The job was cleared as scheduled .This was an innovative contract never executed before in Kenya whereby the contractor to absorb all the risk and penalties . The job was cleared on time and new innovation were borne out of this venture like the use of drones which the company will now take up You must also be ready to take risk that you feel are of great benefit in the long run provided you have the right information on them . What message would you give your children after your end of term? If you believe in anything go for it despite the challenges. When l signed the contract, we had a lot to challenges like the Nairobi ring project, Nairobi-Mombasa line and several others that had stalled. But with sheer determination, I was able to unlock this project and get everything on track.Believing in yourself is the biggest virtue l can leave my children with.E

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THE FUTURE

Doing it for the kids – could they be bothered? Generation Z is half as likely to think that reducing energy consumption is an issue of concern By Watts up Team

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here has always been conflict between the generations especially on matters environment. While Millennials profess themselves to be committed to sustainability with three-quarters saying they were willing to spend money on products from a sustainable source, young people’s commitment to the environment only goes so far. In fact, on certain issues this generation has views that would shock their parents who spent their own youth worrying about the ozone layer. Schneider Electric’s research has revealed that Generation Z – those born in the mid 1990s many of who are now reaching the age of majority – are far less worried about the planet (and their impact upon it) than their parents were. They found that the younger respondents were half as likely to think that reducing energy consumption is an issue of concern. What’s more, they show little regard for a host of environmental issues, from energy saving to reducing plastic waste. In the last few decades, we have made great strides towards reducing our impact on the planet, but the gains we’ve struggled so hard to achieve could be wiped out if the following generations fail to follow in our footsteps. We can only hope that the older they get today’s youth will become

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more aware of our impact on the planet. So how can we encourage them to care about these issues today? One way would be to paint a picture of the world we need to build to ensure a renewable, low-carbon and energy-efficient future. The young are idealists, but they are also ambitious. If we can show them the exciting, technologically-driven advances we are making towards a greener world, we can ignite the passion of these digital-native generations and convince them that the future of the planet is a cause worth fighting for. A glimpse of a greener world When discussing the future of energy with today’s youth, we need to educate them about the wastefulness of traditional energy generation and distribution systems that we have spent decades trying to consign to history. Conventional, oil- gas- and coal-based power plants have yields which barely reach 40-50%, while combustion engines, which propel the vast majority of our means of transportation, barely achieve 30% efficiency. Compare this to electric systems. Electric engines often achieve 90% efficiency, while electric heat pumps achieve yields that are three to four times higher than fossil fuel powered engines. Two-thirds of the energy in the tank is wasted. Fossil-fuel based heating systems (furnaces) have also proven to achieve much lower efficiency levels than electric-based ones. One of the arguments against electric-powered appliances and vehicles is the perceived high cost of renewable energy generation. While this might have been true in the past,


THE FUTURE

it is no longer true in most cases. In over 60 developing countries, solar is cheaper than fossil fuels, while earlier this year IRENA reported that, by 2020, wind and solar generation will be the least expensive electricity sources everywhere.

sources, since these do not necessarily generate electricity when demand is highest. That’s why advances in battery technology is important to future energy infrastructure – especially for appliances and facilities that require Uninterruptible Power Supply (UPS).

The growth in renewable generation is one of the success stories of our age, the result of hard work and determination in the face of those who said that green power was an expensive pipe dream. More needs to be done, however, to create the energy infrastructure of the future, which is why it’s so important to get Generation Z on board.

Energy storage There has already been great progress in this area with the cost of lithium-ion (Li-ion) batteries becoming cheaper even as their efficiency continues to increase. In fact, it’s predicted that Li-ion batteries will break the all-important $100/kWh by 2025. Furthermore, they are being used in an ever-increasing number of more ambitious applications. They are now capable of powering not just electric vehicles, but even powering cities. Elon Musk’s celebrated achievement late last year of building a battery to power South Australia in under 100 days provides a vision of what future energy networks will look like.

Generating excitement in sustainable technologies One example is, smart grids. These enable grid operators to ensure that electricity demand is met sustainably, reliably and flexibly. In conjunction with modern energy storage systems, they ensure that utilities providers can meet demand in the most efficient way possible. But meeting our energy needs depends on more than smart grids, which is why there will be a big expansion in microgrids in the years ahead. Microgrid Microgrids are zones where energy can be managed autonomously. Examples include university campuses, industrial plants and factories that manage their energy resources within their perimeter. These might include generation units — such as wind turbines, solar panels, and traditional fossil fuel generators — and energy storage.

Time will tell whether Generation Z grows up to be as environmentally-conscious as their parents. Even if they’re not, humanity’s hunger for innovation and progress will surely make them want to build on the achievements of past generations – if only to create cheaper, more efficient energy networks for their own children.E

Smart grids and microgrids can only work effectively if there is an effective way to store energy from renewable

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THE GREAT

Unlocking the opportunities in the Energy Act 2019

The Net Metering and Power Wheeling concept are now anchored in law as stated in the Energy Act 2019. The Authority is harmonizing the regulations to be in line with the Act and will share accordingly with the stakeholders.” Nickson Bukachi - EPRA

Nuclear Technology has been here for over 50 years. We have over 400 reactors and only three accidents have occurred making it the safest form of renewable energy” Eng. Collins Juma, CEO NuPEA

We are at the tail end of commissioning another geothermal power plant that should be coming in the next month - 165 megawatts of geothermal power under Olkaria 5. It is one of the most competitive tariffs we have achieved on a geothermal power plant and going forward it should become a benchmark for much cheaper energy that we will be delivering.” Mr.Moses Wekesa Business Development Director KENGEN

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When it comes to energy auctions, we are looking at proper competition and playing in a level field so that no one will have an undue advantage over the other. Another thing is that, for these investor solicited projects, there is need for your own means of evacuation; once you generate your power, you make sure it reaches the transmission line.” Eng. Benson Mwakina Assistant Director Ministry of Energy


ENERGY DEBATE

Unlocking the opportunities in the Energy Act 2019

The New Act 2019 is a progressive piece of legislation that will strengthen the sector and provide predictability going forward. There is a cross-cutting team working on the regulations and by the end of year there will be clarity on several aspects of this Act. But most importantly, it will unlock investment and job opportunities in the sector. Mr. Timothy Gakuo Chief Economist Ministry of Energy

The private sector needs to plug in early, when these regulations on net metering, wheeling and even the auction policy itself are being drafted. This is because in the end you come up with the regulations and then you call for public participation”. We feel that their input should be included in the drafting phase even before public participation. George Aluru, Vice Chair Energy Committee KEPSA

In Kenya we have a tariff that is self-sustaining, and so we can walk into the future confidently. As Kenya Power we look forward to participating in the Energy Act 2019 and believe it is strong in its provisions, obligations to the customer, utilities and to the distribution licensees as they come in” Eng. Rosemary Awour Energy Management KPLC

So far officially we have a wheeling charge for evacuation of power from the Ethiopia-Kenya line, and the line from Kenya-Uganda to Rwanda. We are still negotiating the wheeling charge for the line between Kenya and Tanzania, but at least the principles are well understood and at the right time we will be letting consumers and stakeholders know how it is going to be computed”. Eng. Dr John Mativo Technical Advisor KETRACO

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THE TEN YEAR JOURNEY

The anatomy of a

Smart System “From copper wires to fibre in 10 years”

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THE TEN YEAR JOURNEY

The more than 2,500KM of high-voltage transmission infrastructure under Ketraco’s watch may be huge but that is nothing compared to 5000KM that’s coming up in the next three years. And as JAMES NGOMELI finds out, the agency is digitising its operations to monitor it all from a central point.

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ow fast Kenya gets plugged into its ambitious plan of transforming into a fully industrialised nation will highly depend on the pace its homes and businesses get connected to the electric grid.

President Uhuru Kenyatta, who is keen to widen the electricity network in the country wants, as part of his legacy that every home and business have access to reliable power. This will surely set the stage for the attainment of Vision 2030, Kenya’s longterm development blue-print that aims to transform the country into a newly industrialising, middle-income country. “In collaboration with development partners, we have made tremendous gains in scaling-up connectivity over the last six years, with the number of electricity connections rising from 2.264Million in March 2013 to Sh7.029Million in March 2019.

Uhuru Kenyatta and his counterpart President Paul Kagame during the inauguration of a 140 – megawatt at Olkaria Geothermal Power Plant in Naivasha.

“In collaboration with development partners, we have made tremendous gains in scaling-up connectivity over the last six years; with the number of electricity connections rising from 2.264Million in March 2013 to Sh7.029Million as at March 2019”

The tangible impact on the lives and livelihoods of our people, associated with the increased electricity connectivity, cannot be gainsaid,” said President Kenyatta in his State of the Nation address in April. High-voltage lines He noted that installed capacity had increased from 1,768 MW in March, 2013 to the current 2,712 MW, with Lake Turkana Wind, Ngong Wind and Garissa Solar Power Plants joining the grid within the last year. If the President’s name was blacked out and readers were asked who the speaker was, few would have guessed it to be the Head of State. A good number would have brought up a name from the Kenya Electricity Transmission Company (KETRACO), whose mandate is to construct high voltage transmission lines nationwide. KETRACO, which is celebrating its 10th birthday this year, plans to aggressively push electricity coverage around the country to 16,000 Kilometres of high-voltage power lines, bringing Kenya’s total coverage at almost 90 per cent in electricity access.

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The road to the current levels of electric coverage has been bumpy. And the leadership of the KETRACO knows that it will not be all smooth going forward. But if they have got this far, they are sure they will emerge victorious. Dismal statistics The World Bank notes that under current policies, an estimated eight percent of global population will not have access to electricity in 2030. 90 per cent of them will be in sub-Saharan Africa. However, thanks to President Kenyatta’s passion for lighting up and powering the country, Kenya, a Sub-Saharan country, will not be part of this dismal statistic. KETRACO will not allow it. What keeps Fernandes Barasa, KETRACO’s CEO and Managing Director, awake at night is the need to strengthen the grid, increase access and evacuate other clean energy sources in the country while ensuring regional interconnection. “We need to build a robust national grid and ensure high quality electricity is realised by having a stable power system in the country,” says Barasa. Since inception in 2009 after being hived off from Kenya Power and Lighting Company, KETRACO has been able to string up different parts of the country to the electric grid, ensuring that the wheels of the economy continue to roll. Bigger projects KETRACO is a State corporation with the mandate to develop a new high-voltage electricity transmission infrastructure that will form the backbone of the National Transmission Grid, in line with Kenya’s Vision 2030. It has completed over 25 projects, constructing more than 2,500KM of high-voltage transmission infrastruc-

ture comprising of lines, switch gears and sub-stations across the country. In the next three years, the company plans to unveil a further 5,000KM. Besides the three renewable energy sub-stations that the President highlighted, other notable projects include the 482KM, Mombasa – Nairobi line which was completed in December 2017. Others are the recently completed 435KM Loiyangalani- Suswa Line. There is also the 328.5KM Rabai-Malindi-Garsen-Lamu 220 kV line and 250KM Kindaruma – Mwingi – Garissa 132kV line. More and even bigger projects are on the way. Transmission lines totaling 2,359KM are currently under construction. Starting September next year, Western Kenya will for the first time get a taste of geothermal energy from the Rift Valley with the completion of the 300 kilometre Olkaria-Lessos-Kisumu line which runs from Naivasha steam fields through Eldoret and on to the lakeside city of Kisumu. Record-breaker But perhaps the record-breaker in the cock-tail of KETRACO’s on-going projects will be the 612KM Eastern Electricity Highway Project set for completion in October 2019. The Kshs.126Billion project involves the construction of a 1,068 kilometre high-voltage direct current 500 kV transmission line between Kenya and Ethiopia. There are also those in the pipeline - over 5,000 kilometres of high-voltage transmission lines that KETRACO plans to construct in the near future. KETRACO is also developing three key power inter-connectors with Kenya’s neighbouring countries of Uganda, Ethiopia and Tanzania, according to Godfrey Kariuki, head of Corporate Planning and Strategy.

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THE TEN YEAR JOURNEY

The planned Eastern Africa electricity export and distribution system

Source: Eastern Africa Power Pool (GOK/EAPP and EAC 2011) 24

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THERUNNING TEN YEARHEADLINE JOURNEY

Godfrey Kariuki, Head of Corporate Planning & Strategy speaking during KETRACO’s Annual Research Conference Planning and Strategy Mr Kariuki says that once the power inter-connection with Ethiopia- and DRC- is complete, Kenya will be able to sell to its neighbors surplus geothermal power, which doesn’t fluctuate with the rains as does hydro power. “It will be at a lower cost to them as opposed to putting up thermal power generators. In Kenya we too have thermal power generators, but it is the objective of the government to phase them out” adds Kariuki.

“Most of the infrastructure projects that have been mushrooming all around are donor-financed, which means the funds are from subsidised loans. The donors thought that it is not fair to use concessional funding to benefit private shareholders in the Kenya Power and Lighting Company,” said Macharia. KPLC’s composition is a public-private shareholding where the Government’s stake is at 51 per cent while institutions and individuals own the remaining 49 per cent.

Tenth birthday When the success story of Kenya’s majestic march towards the attainment of universal access to electricity is told, as was the case with the president’s speech, KETRACO’s long and winding journey must feature prominenetly in the narrative. In the happy ending to Kenya’s electrification story, one of the means to this nirvana is KETRACO’s high voltage electric lines.

Thus, KETRACO was hived off from KPLC (together with GDC which was formed to take care of exploration of geothermal energy) in December 2008. The newly created outfit was left to fend for itself with just handful of employees all crammed in one office at Stima Plaza, Nairobi. It was a tough beginning.

As it celebrates its 10th birthday, KETRACO has been taking stock of its past even as it charts the way into the future. The State agency, with markings in the country’s development blueprint, started off humbly in a one-room office in Nairobi. In the words of Duncan Macharia, the Company Secretary who also doubles up as Senior Manager in charge of Legal Services and one of the first team members, KETRACO “happened by chance.”

Initial staff KETRACO was, in a way, a small fish in a big pond, snapping up big money projects even as some feared that they didn’t have adequate capacity. “When embarking on the Mombasa-Nairobi transmission line, the World Bank felt that we didn’t have the capacity and wanted Kenya Power to be involved in the project,” remembers Macharia. With a physical office, they started recruiting the initial staff beginning with the Human Resource personnel. Next to be appointed was the Managing Director. “At the start, departmental functions were being carried

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a tale of stumbles and near-defeat. Through dedication and hard-work, KETRACO has emerged victorious. It has taken a lot of grit and sacrifice to get KETRACO to where it is today.

Duncan Macharia - Company Secretary out on a need basis. If you needed a cashier, you quickly went out and got one,” says Raphael Mworia, who heads the public relations office at KETRACO. Joel Kiilu was KETRACO’s first Managing Director. The chairman was Justus Kageni. Mr Kageni insisted that KETRACO was like a project management company which should remain lean, maintaining a workforce of not more than 50 employees. Away from media People like Mr. Kariuki, who joined

KETRACO in March 2010 as the pioneer economist and head of planning, stayed for three years without a single employee in their department. It was not until November 2013 that his department got another economist to help with the planning.

“Let them see

The other strategy for KETRACO was for the company to lie low, keeping away from the glare of the media as much as they could until the time was right. “Let them see towers growing and then they will ask - what is that?” or so the chairman’s thinking went, according to Macharia.

Duncan Macharia - Company Secretary

Behind this blitz of growth is also

Mr. Johnson Muthoka Head of Way-leave department

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Johnson Muthoka, who heads Wayleaves department, says there have been times when they have stayed in the field for weeks without going home. “It is that hard work, pushing and pulling together, that made us grow. When my children ask why I have been away for so long, I show them the lines and tell them the history behind the lines,” says Muthoka.

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THE TEN YEAR JOURNEY

Peoples’ lands And there is a good reason why Muthoka and his team had to stay for so long in the field. The wayleave department is not just one of the busiest units at KETRACO, but also one that has tested the endurance of KETRACO. Way-leave is a Right of Way (ROW) over the land of another. And for the 10 years that KETRACO has existed, its efforts to lay transmission lines over people’s property has given senior management sleepless nights. Projects have been delayed and others have had to be re-negotiated. And more often than not, KETRACO has taken the flak. “Because we are dealing with the public, we are dealing with people’s land. You know land is a very sensitive issue for Kenyans,” says Macharia, noting that everyone in KETRACO agrees that way-leave acquisition is the biggest challenge that the organisation faces.

Construction of transmission lines

Many times, KETRACO has taken a beating as a result of these delays. When the government sometimes delays the disbursement of funds, KETRACO is forced to re-value compensation.

“We have tried

Litigation is also a challenge in terms of landowners going to court to stop KETRACO from traversing through their land for various reasons. “We have tried hard and from 2010 to 2019 have had only two arbitrations out of twenty projects we have done. We engage in preventive lawyering by bringing in lawyers to assist in dispute resolution. It’s not about winning cases in the legal department its about negotiations and agreeing with our partners” explains Lydia Wanja, the Conveyancing and Legal Manager.

hard and between 2010 to 2019 have had only two arbitrations out of twenty projects we have done.” Lydia Wanja Legal Manager

Lydia Wanja - Legal Manager

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Wayleave compensation “If some affected land is worth Kshs. 2Millionand we are utilising the whole of it,they owners need to get alternative land to settle on. If the compensation processing takes two years, the land may be now worth Kshs.4Million. This is why it is important to pay promptly,” explains Macharia, noting that there are attempts to get financiers incorporating way-leave compensation into their financing models Way-leave compensation is done by the Government and not development partners. Unfortunately, the counter-funding from Government has not been coming on time, leading to massive delays. For instance, the Nairobi-Mombasa line, KETRACO’s longest project, was concluded almost two years late. The reason was mainly because of way-leave issues, says Johnson Muthoka, head of wayleave at KETRACO. Macharia reckons that if they could just get 50 per cent of the wayleave budget for every line, at least a few months before it starts, “we can accomplish all these preliminary works in good time.” KETRACO has also developed a Resettlement Policy Framework (RPF) which it hopes will end the shenanigans of wayleave compensation. The framework applies to all its transmission infrastructure developments and pertains to all eligible persons regardless of the severity of impact. Crucial function But KETRACO has weathered the storm, transforming its image from what people thought was a purely project management corporation to one that is actively involved the development and maintenance of the transmission lines.

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Joseph Siror Head of Technical Services speaking during KETRACO’s Annaul Research Conference

Dr (Eng) Joseph Siror, General Manager, Technical Services, oversees the critical dockets of wayleave acquisition, planning, project management and construction. When Eng Siror joined KETRACO in 2017, the corporation was mostly concerned with pending projects. For the implemented projects the attitude was, ‘let bygones be bygones.’ However, Siror believes that there is a “crucial function” of operations and maintenance which comes at the tail end of a project after implementation. These functions were initially being handled by KPLC. Tests and checks “Since the introduction of this department, we have taken up technicians and relevant personnel and posted them in our various sub-stations. Whereas in the past the main mandate of KETRACO was completion and implementation of projects, there was need to ensure that the objective of these projects were met thus creating a necessity for this department,” says Siror The project management department ensures that resources are deployed to where they are most needed.We have the protection section which is particularly critical given the costs incurred when there are power outages. After all this is done there is commissioning, where they assess, check and test that everything is okay. Thereafter the line is energised. The department also is responsible for trace line inspection where they ensure that nothing is distracting the power line, be it in form of trees or structures. Regional power trade The last department is Power Management. According to the recently enacted Energy bill 2019, one of the mandates KETRACO is poised

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THE TEN YEAR JOURNEY

“This project is meant to reduce project Mumbua Giati Head of ICT

timelines and increase accountability due to the transparency and visibility of the process”

to undertake is system control which has been undertaken by Kenya Power in the past. Being fully owned by the government, KETRACO will be independent in the control of this system as compared to Kenya Power which may be consumer-driven. There is an ongoing process to procure a new national control center, which will have capabilities of system monitoring, planning, training and load dispatch functionalities. The control center will take charge of the entire grid. This will also be instrumental in the facilitation of regional power trade which will be facilitated by this department. KETRACO also has a section that deals with SCADA (Supervisory Control and Data Acquisition) and telecoms where it has deployed top of the range protection schemes to help mitigate against short circuits. By this, connected substations communicate whenever there is a risk or overcapacity leading to cut off. Intelligent system Like many going concerns, KETRACO is facing a number of challenges including inadequacy of resources especially the shortage of engineering skills. Another issue is to do with

vandalism of its installations. “Given that our lines traverse very large areas, our own resources may not be able to provide security of this lines,” says Mr Siror, adding the agency is working with the government to address this challenge. “Going forward, our substations will digitised so that operations can be accessed and monitored centrally.” At the moment, KETRACO is already consulting in an effort to shift from the use of copper wires at its substations to fibre, which allows transmission of substantial data and facilitating a smart network. This will prepare the ground for an intelligent system that reports and advises on issues affecting its components. Operations and maintenance The functions of operations, maintenance and the entire value chain of implementation of transmission infrastructure will be highly boosted by an ongoing system upgrade of the IT department for business activities. The major infrastructure projects in IT went live in January 2016 with the implementation of SAP. The first phase was in finance modules, procurement, human resource and payroll and project areas. The second phase involved business intelligence, document self service, employee relations and customer relation areas.

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THE TEN YEAR JOURNEY

This project and setup was state of the art and won the organisation a Golden award in SAP Quality Awards both in Africa and in the global awards held in Germany. Service department ( GIS System) Mrs. Mumbua Giati was the first IT staff in KETRACO and is excited about the future. The geographic information system (GIS) and the Integrated Location Intelligence System will track the entire lifespan of a project- right from the pre-construction phase through the construction process up to completion and testing. The progress, at every stage will be relayed to the CEO and relevant departments real-time. ILIS System The system will be able to locate work sites and many other issues remotely. It will also be able to identify problems affecting the transmission routes which will then be communicated to the relevant person. “For example in case of a project by an independent consultant, the system allows visibility and the information is loaded in the system. This includes the feasibility and pre construction done by environmentalists and social economists including resettling plans,” says

chief ICT manager Mumbua Giati. Area survey The next step is planning the route using information on area survey and topography. Land surveyors get the information they need which is already loaded into the system, explains Mrs Giati. “Land economists assess crops and structures and the amount of land affected by the line so as to form a basis for payment and compensation. The system is also able to compute this. Then there is the approval and verification process which is done online followed by amendments should there be any need for any changes.” The SAP system comprises a number of fully integrated modules, which covers virtually every aspect of business management, and which is available to the CEO and all the relevant departments. “The contractor is then given a go ahead to start construction, with a requirement to give daily reports.” This system is meant to reduce project timelines and increase accountability due to the transparency and visibility of the process. Every person who is involved is required to key in information in the system.

ARIBA KETRACO has also launched another e-procurement solutions project called ARIBA where all aspects of the tendering process - preparation, opening, evaluation and awarding of tenders - are available online. This allows suppliers to track their payments. Other systems include contract management module and supplier management and evaluation modules that assess viability and performance. Threat of Cyber attacks With the newly enacted Energy Act 2019, KETRACO is now involved in the physical and cyber security aspects of the SCADA system. This is a big issue as they take up the role of System operator. They are benchmarking with the best in the world to ensure that they build adequate capacity as they take up the new role. Communications and Public Relations The department has been critical in the steady growth and stability of KETRACO, and will continue to be a pillar as long as wayleave acquisition continues to be such an emotive issue in the country. As land scarcity persists and powerlines expand, the potential areas of conflict are many.

Unlike a road under construction, transmission lines have to be 100% complete to be used”

Raphael Mworia Head of Corporate Communications 30

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The Raphael Mworia-led department has so far started an internal and external newsletter to spread KETRACO’s gospel, both to its disciples (employees) and to the public respectively. Besides holding conferences locally and internationally, the department has done well at planning and executing presidential events through project commissioning and launches. They have also developed documentaries and set up a customer care center. “We also have communication plans for various aspects of the projects’ life cycles. We have prepared communication plans for over 30 projects. During the construction phase of these projects, we need to keep informing the stakeholders on what is happening what are the benefits of these projects, both at national and local level. We look at all that,” says Mworia. Media criticism They have since branded all 30 projects. “We have branded in over 80 different locations and that includes directional signage, substation signage, and all that has been done within the timelines,” says Mworia. Sulea Naliaka says they have built rapport with media, occasionally flying them to the lines- a break from the many press releases they send out. As part of the energy Ministry initiative, the Energy Journalism Excellence Awards (EJEA), KETRACO has participated for the last four years they have been held. “It gives us an opportunity to go out there and sit in a room and do workshops with media,” says Sulea. “Sometimes we experience bad publicity,” she adds. One of the soft-spots for media criticism has been on way leave compensation. The future of KETRACO- and thus that of the country- could not be

Moses Mulonzia Head of Internal Audit & Risk Department brighter. And there are so many projects in the pipeline for the corporation. Auditing the Processes “I always say that this organisation is destined for greatness. Kenyans are not interested in the details of poles and metres. All they want know is whether there is power and whether it is affordable,” says Mulonzia “How this is achieved is the job of the employees in this organization that is why we went to school, whether we use geothermal power, wind power and hydropower these are details. That is why in audit we ensure that our transmission master plan places more emphasis on what is cheaper. To do this we may have to export electricity whenever possible and transfer the surplus to the Kenyans through reduced electricity bills” says Mulonzia. All processes in the company must be audited. In fact the biggest challenge for Moses was not staff numbers but the staff mix. “We have recruited an engineer, ICT specialists, professionals in survey work and now risk management specialists are with us. Not forgetting the accounting people,” he says The department has improved the interaction between the management and the board. Suspicion towards internal audit operations has reduced by attending the CEOs kamkunji and interacting with colleagues. “We are also strong in dealing with corruption

cases. If one is caught engaging in corruption they are kicked out first before going to court. We have institutionalised risk management and I am happy to report that by the time we hit the next financial year which is in June we will not have risk management and internal audit in the same department,” he says. Electric train The future of KETRACO looks great. Demand is set to grow with the connection of various projects to the grid It plans to convert the Standard Gauge Railway (SGR) from its current diesel-driven engines to electricity-driven lines which will see them make a switch to use of clean energy. About 14 power substations will be constructed to serve the Mombasa- Nairobi segment of the line which is expected to run through Uganda and into Rwanda. Today, there does not seem to be strong demand for power from firms, but as Kenya industrialises this is going to change. Mega projects such as Konza City Technopolis and Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project (LAPSSET) will require lots of power. KETRACO says itwill not disappoint as it is well prepared.

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THE TEN YEAR JOURNEY

Electrification of SGR 14 power stations will be constructed

Special Economic Zones

Evacuating Clean Energy across Kenya LAPSSET project, which includes the port and SEZ

Konza Techno City, a dedicated substation will be constructed in the city

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I BELIEVE

It is our duty as women in the energy sector to create awareness on the economic and social impact including promoting women in the energy value chain both as suppliers and users. That is why my research work has generally focused on the social-economic aspects of energy systems for rural development, sustainable livelihoods, gender and urban poverty

I would tell any person with a dream to be part of the energy sector to go for it. Do your best, learn as much as possible about the field one wants to operate in. Network, get to love what you do and definitely do research. Believe in the beauty of your dreams and let things fall to your favour. Don’t be afraid to be great

Catherine Ndinda Research Award Winner2018

Professor Joy Clancy - Research Award Winner 2019

I would encourage them to keep their heads high and give their best in everything they do. They should aim for excellence in their daily lives. There are many opportunities available in the energy sector that they should be ready to grab and run with. The ladder of success is big enough for all of us to climb and even has space for us to lift others up. Let us all hold hands as we take the country to posterity.

Martha Cheruto Professional - Technical winner 2018

The energy sector is very wide and accommodative to every qualification. There are opportunities for both the scientists and non scientists. The sector is also very demanding and as a woman you have to live up to the challenge. That is why it has previously been seen as a male-dominated sector. The beauty is that if a woman can prove herself, there are so many opportunities for the top jobs. I encourage women not to fear joining the energy sector especially in new and unique areas such as nuclear energy”

Sarah Nafuna Mudoko Professional - Technical winner 2019

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SUSTAINABILITY NEWS

Inside Kenya’s Waste-to-Energy Plant

The facility in its final stages, is part of the campaign to cut carbon emissions to levels between 26 and 30 percent by 2030 writes David Njagi

A

waste to energy treatment plant has been set up in the second largest slum in Africa, the Kibera slum. The plant is in its final preparation stages ahead of its operational timeline, following its formal launch in January 2019. Kenya is among the countries that are targeting to reduce carbon emissions to levels between 26 and 30 percent by 2030. Speaking to our reporter, the Agency for Science and Technology Information Communication (ASTICOM) Chief Executive Officer, Dr Leah Tsuma, confirmed that all preparations for the project including site mapping have been completed, since the concept was initiated five years ago. “What remains now is the actual construc-

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tion of the factory at the site identified in Kibera slum. We expect operations to begin by the end of this year,” says Dr. Tsuma, whose company is in charge of the project. With $12.7Million (about Kshs.1.3Billion) funding from the Climate Technology Initiative, a multi donor agency, the factory will be converting solid waste supplied by Kibera residents into energy. Chemical process It will also have a unit that will be purifying sewage from the polluted Nairobi dam into water that can be used for businesses in the slum like car washes and cleaning public toilets, says Dr Tsuma. The purification process will use anaerobic digestion where raw sewage is collected in a big tank and filtered. It will then be taken through a chemical process to remove harmful bacteria. While India has a similar project, this is the first of its kind in Africa, says Tsuma, adding that youth and women groups in Kibera will be issued with contracts to supply solid waste to the plant. Other countries with similar projects in Africa are


Ghana and Ethiopia which opened its plants last year. Biogas production Purified sewage water from the polluted Nairobi dam will also be provided free of charge to small businesses in the slum like car wash and cleaning of public toilets. The plant is expected to generate eight megawatts of electricity by converting solid waste into biogas. It aims to generate 6,000 tonnes of methane per year, which will be sold for cooking. “The project offers enormous potential because it answers many aspects of sustainable development. It is dealing with issues of livelihoods, sanitation, energy, security and aspects of gender,” says David Ong’are, the Director in charge of Compliance and Enforcement at the National Environment Management Authority (NEMA). “Management According to Ong’are, the project becomes interesting because it is turning something that is a menace to the community into opportunities for employment, energy generation and meeting other community needs.

“Most of the time we throw the garbage in the river or by the roadside. At the end of the day we end up contributing to environmental pollution due to these challenges,” says Najoli. Her group has partnered with ASTICOM (K) Ltd., where they have signed a contract to supply garbage to the factory. In return, the company will be pay for the supplies and supply them with working tools including a truck to transport the garbage, she says.

of both solid and liquid waste is a major challenge in Kibera. We are answering questions on what is a green economy”- David Ong’are, Nema director of compliance and enforcement.

Social enterprise “In Kibera, management of waste - both solid and liquid is a major challenge. If this waste can be converted into a resource, then we are answering the call for a green economy. We are also creating a circular economy,” says Ong’are. The project is expected to improve the health of Kibera residents, according to Mary Najoli of the Shikanisha Akili Women Group. Najoli, who lives at the Soweto East Community Unit in Kibera says her women group is a social enterprise which has invested in garbage collection and bead work. But garbage collection in the slum has always been a challenge because her group does not have working tools like wheelbarrows, a truck to transport the waste and even a site to dispose the waste after collection.

“The Kibera environment will be very clean. This will eradicate diseases such as diarrhoea, cholera, typhoid fever, amoeba, dysentery and other illnesses which affect our community,” says Najoli.

Health hazards Despite the rosy outlook however, residents are concerned about health hazards that come with waste recycling, like exposure to radiation. ASTICOM (K) Ltd. has partnered with the government environment management agency, NEMA, to ensure that a comprehensive environmental and social impact assessment before the company begins operations to mitigate such risks. “We also need to ensure that the project does not have negative impact. NEMA comes in to give technical advice and also minimize any potential adverse effect to the environment and the communities,” says Ong’are. E

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ENERGY LEADERS

A woman of beautiful

dreams

Hon. Irene Muloni Minister for Energy & Minerals Uganda has beaten the odds to change the energy sector in Uganda where participation of women in the value chain has for a long time been low and ignored despite the big potential. A mother, a wife and a leader, Irene talks to Watts Up magazine about career mentorship, and her desire to boost access to affordable energy

“There is no force, equal to a woman determined to rise.� W.E.B Dubois.

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ENERGY LEADERS

Hon. Irene Muloni, Minister for Energy & Minerals, Uganda

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ENERGY LEADER

Hon. Irene Muloni, Min. for Energy & Minerals in Uganda with Kenya’s CS for Petroleum & Mining Hon. Peter Munyes during the Petroleum Conference in Mombasa

G

ive us a brief background of yourself I am an electrical engineer by profession. I graduated with honours in Bachelor of Science in Electrical Engineering from the Makerere University. I also hold an MBA from Capella University in the US. I’m the minister for Energy & Mineral Development since 2011, having been reappointed after finishing the first term. Do you have to be an MP to be appointed to a ministerial position in Uganda? Not necessarily, there are about 10 ministers who are ex-officials but you still have to go to parliament to present and defend government’s position. The only thing you do not have as an ex-official is voting rights. I am an elected MP since 2011. You have grown through the ranks as an electrical engineer. What do you think is the biggest challenge deterring girls from pursuing this course? For now, the landscape has changed a little bit for the better. I can now see many women who have taken engineering as a profession and I’m proud

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of them. During my time, we were just a drop in the ocean due to patriarchal values and gender biases in the society. For a long time women and girls have been perceived as a weaker sex whose duty is to bear children and perform household chores. Women are perceived to be incompetent in providing meaningful contribution to the development of the economy. We should recognise that women are as important as men. However, it takes time for people to overcome their cultural bias. As time goes by, things have started easing out as we encourage girls to embrace STEM subjects. Gender bias has motivated women to work even harder to prove to the society that they are capable and equally competent. For those of us who have made it in this field, we are role models and mentors to the young girls. Role modeling and mentorship gives young girls hope. What drove you to become an engineer? Career guidance and counseling is very important and is what motivated me to take engineering. I was the best and an all-round student in my rural school and joined Gayaza High

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school one of the best schools in Kampala. After finishing my A-level and performing exemplarily, I wanted to become a government economist but my teacher advised me to enroll for engineering because I was good in all subjects and more so sciences. I passed my o-level exams and joined Makerere University to pursue electrical engineering. I felt it was more natural and effortless compared to mechanical and civil Engineering. I graduated with honours and started working for Uganda Posta & Telecom Corporation for six years. I left to join Uganda Electricity Board as an executive engineer and immediately I was promoted to senior communication engineer. I took part in the restructuring of the energy sector as a manager of Information Technology. Due to my excellent performance, I was promoted to customer care manager to help the company reduce losses and enhance customer care services. During my tenure, I initiated programs that saw reduction of losses drastically. Within two years, I was promoted to Managing Director . This was a time when the energy sec-


ENERGY LEADER

tor was undergoing restructuring in Uganda. I ran the company for 6 years and quit to join politics. I was elected as a member of parliament, and the president appointed me to serve as the Cabinet Minister for Energy. What inspired you to join politics? I wanted to be a part of the team that makes decisions which impact on people’s lives by partici[ating in the policy making processes. Tell us about your first cabinet meeting? The appointment was humbling. The fact that I had been a managing director where I had managed people and implemented policies meant that I knew how to make things happen. The challenge for me was to know the expectations of the President so that I could deliver on them. Thanks to the hints from friends and people who had been in ministerial positions I soon learnt how to go about it. However, managing a whole ministry means working with many people, some of whom are older and were at some point your seniors. I communicated my position, and emphasis was on the job to be done so everyone knew what was expected of them.

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I understand that I have a job I have to perform, my dreams, family, the society that has great expectations of me and God who is watching over my values. I am always focused on issues and not personalities. This has helped me work in harmony with others. I used

to have a faster decision making process in my previous positions but in this job there were bureaucracies and procedures to be followed but you have to learn and navigate. Always keep in mind that your deliverables is what your boss wants instead of working too hard only to find yourself in darkness with no work actually done. What do you think was your biggest crisis and how did you manage it? When I was appointed as a minister, there was already a crisis. We did not have enough investment in the sector and the government was subsidising tariffs. This necessitated the government to allocate more investment in the energy sector. This helped me to embark on projects that increase electricity generation which have led to increased electricity output. We then came up with free connection policy and many people are now connected. With the directive of industrial parks by the President, we are extending electricity to these parks which has increased demand for the excess electricity. How do you balance work, politics and family? I understand that I have a job to perform, besides my dreams, family, the society who all have great expectations of me. And God who is watching over my values. However, my Masters program helped me understand myself especially the self-development model which assisted me in discovering myself. I knew my strengths, weaknesses and extremes. I became aware of my values and in life we succeed because our values are being honoured. The only way I compensate for the family is by loving them, enjoying the little time I get with them and making contributions to their lives so that they know they mean a lot to me.

What is the most important thing you want to accomplish as a minister in the remaining term? Increasing access is the biggest issue we have in the sector. We have increased on capacity but we have to work on transmission and distribution so that electricity get in all parts of the country. That is the main agenda of the ministry. We are also looking at how fast we can get oil. The challenges we are struggling with now is lowering the tariffs and at the same time financing other projects that will ensure everyone has access to electricity. We are also promoting renewable energy in the country. On the mineral potential and exploitation, we need investors to exploit these resources. My ministry alone can support the economy of Uganda if mineral are fully exploited. What will you tell your children and grandchildren about your experience as a civil servant? Being a Civil Servant is not the easiest job but I am fulfilled because of the contribution that I have had on the economy and the life of many Ugandans. I have also created a mentorship platform for young boys and girls because I realised our children suffer most since no one pays attention to them. I will use this group to share my experience with them. Do you ever take a holiday or even switch off your phone? I take short holidays once in a while. I would love to take longer holidays but the nature of my work is quite demanding. . The short holidays I normally take are just two weeks long, and intended to spend time with my family. I never switch off my phone because of the nature of my work. I can get an important call anytime.E

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CARBON TRADING

Low-hanging dollars of Turkana wind

The northern Kenya wind farm is expected to generate $ 6.6 million (about Kshs660 Million) annually from carbon credits By David Njagi

Plans to harvest carbon credits from the Lake Turkana wind farm are at an advanced stage, if latest reports from the Ministry of Energy are anything to go by. And if all goes to plan, a small percentage of the carbon credits proceeds will be invested back to the Turkana community, according to Energy Principal Secretary Joseph Njoroge. Eng. Njoroge confirms that this arrangement has already been incorporated into the Power Purchase Agreement (PPA) that was signed between the Lake Turkana wind power plant and Kenya Power and Lighting Company (KPLC).

Lake Turkana wind farm makes for an ideal candidate to win carbon credits” – Eng. Joseph Njoroge, Kenya’s energy PS

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According to a 2017 report by the Low Emission Development Strategy (LEDS) global partnership, the energy plant is expected to earn Kenya some $ 6.6 million (about Ksh 660 million) annually from carbon credits. Funded by the United States Agency for International Development (USAID) the report adds that it will cut emissions amounting to 740,000 metric tonnes of carbon equivalent annually, by displacing fossil fuel fed electricity generation. Thermal power The Lake Turkana wind farm carbon model is expected to borrow from the one used in Olkaria by the Kenya Electricity Generating Company


CARBON TRADING

(KenGen), where part of the proceeds are given to the community. Carbon credits, also known as certified emissions, are processed through the Clean Development Mechanism (CDM) to reward projects that have made progress in reducing greenhouse gas emissions. Kenya is also engaged in the Voluntary Carbon Market (VCM) through projects that satisfy the Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+) model. “Addition of the energy generated by the Lake Turkana wind farm to the national grid will reduce the use of thermal in power generation. This is what makes it an ideal candidate to gain carbon credits,” says Njoroge. Cost of energy In January 2019, the government confirmed it had connected 310MW of electricity from the Lake Turkana wind farm to the national grid. The largest of its kind in Africa, the Sh72billion project has taken about 10 years to complete and is powered by 365 turbines. “It is a critical project even from the East African perspective,” argues Johan Helberg, the Head of Siemens Kenya, Director of Energy, East Africa and also the Chief Executive Officer for Siemens Services Organisation in Africa. According to Helberg, the Lake Turkana wind farm project is expected to herald change that Kenya needs at the County and National levels, and even community buy-in. For instance, he argues, the extra units pumped into the national grid can be useful in reducing the cost of energy in the health and education sectors, as well as create new business opportu-

nities. Energy technologies A recent Guardian media report indicated that there are various carbon offset schemes that allow individuals and companies to invest in environmental projects around the world in order to balance out their own carbon footprints. Some schemes use clean energy technologies or purchasing and ripping up carbon credits from an emissions trading scheme while others work by soaking CO2 directly from the air by planting trees. Apart from the Lake Turkana wind farm, other projects that have been registered by the United Nations Framework Convention for Climate Change (UNFCCC) include the Mumias Sugar Company’s sugarcane bagasse co-generation, Olkaria III phase 2 and Olkaria II geothermal expansion. The Lake Turkana wind farm project was registered by CDM and UNFCCC in February 2011. Trading opportunities Besides, Njoroge argues, this move by the government is expected to open up carbon trading opportunities for medium and small micro enterprises including those that manufacture clean cook stoves, domestic biogas and charcoal briquettes. “Governments do not live for a day but for a long time. We are benefiting from investments that we had done very many years back. This is why we need to exploit all the renewable sources that we have including wind energy whose base load will help support our industries,” says Njoroge. Kenya requires energy to the tune of 40,000 megawatts. Currently the capacity is at 2,300 megawatts, he says.E

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ENERGY CULTURE

The FGM-to-STEM Council By Laura Nashipae Lepore

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hat is FGM-to-STEM council and what is it all about? The council is a network of like-minded individuals and corporate entities committed to eradicating female genital mutilation (FGM) and subsequent early marriages. The FGM to STEM council aims to collaborate with AMREF to establish an excellence centre that will act as a safe haven for victims of FGM. The council will facilitate the movement towards helping girls to overcome the stigma and trauma that comes with FGM. What is the impact of FGM on education? FGM has a negative impact on the girl child. It has been linked to low educational performance of girls in rural areas where it is practised. Along with losing valuable time out of school, FGM brings with it psychological trauma for girls. The act of physical violation strongly correlates with the poor performance the girls exhibit when they go back to school afterward.

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“Your background does not define you, your ambition does. Be a WOT - Woman on Top!

By Laura Nashipae Lepore Electrical & Electronic Engineer from Narok County It is pretty uncommon for girls to resume their schooling after undergoing “the cut”. Culture dictates that a girl who has undergone the rite of passage is of age and can be married off, often to significantly older men. These men often “book” the girls from a tender age by creating good relations with the girls’ parents. Stories of 15 year old wives giving birth are not uncommon in some regions in Kenya. On the other side of the coin, ladies are under-represented in the energy space owing to the fact that they are denied the opportunity to further their education after dropping out of school at such a tender age. It is a common norm that while the girl child is tending to her wifely duties, the boys are continuing with their education. This fact contributes to few girls in the community taking up opportunities in higher institutions of learning, not to mention, science, technology, engineering and mathematics (STEM) subjects, and career paths. Why is FGM still common in Kenya? FGM is reportedly done for conformity, and women who have been circumcised acquire some form of prestige in the eyes of the community. Some Kenyan communities practice FGM as part of their cultural preservation.


ENERGY CULTURE

Why STEM? STEM forms the basis for industrialisation. It forms the basis for men and women alike to secure a spot in the government’s Big 4 Agenda and be prepared for the exponential industrial growth Kenya is experiencing toward achieving vision 2030. STEM can assist girls to step out of the trauma that comes with FGM and increase their self-esteem. As simple as it sounds, being able to create something with one’s hands brings a sense of fulfilment to oneself. A simple act of powering a light bulb using ordinary household equipment sounds quite basic but can mean a mind-set revolution to some young girl out there. Why are we doing this? To inspire girls to take up sciences in addition to going to school. To demystify the myth that sciences are just for the boys. To encourage resource mobilisation in the vulnerable areas and form a network of mentors who can take time to inspire this group of girls. To address the education material needed to inspire sciences, for instance, a knowledge hub where science stories are told. How can corporates participate? Corporate entities can visit schools in affected areas accompanied by engineers so as to show that implementing STEM in these places is possible. In addition, both male and female university students can also visit schools in

FGM-prone areas to show girls that it is possible to do sciences and excel. Big players in the Energy/STEM industry too can visit FGM-prone schools part of their social consciousness, for instance. Furthermore, contractors in the area can visit the nearby schools to inspire the girls on what engineering entails, for example, when building a road, waterworks or a bridge. This would enable students to see first-hand, the impact of STEM and how it can improve their community. What is the role of AMREF in the council? AMREF will leverage on the platform to reach out to schools in FGM prone areas. They’ll provide the technical aid and an implementation framework. AMREF will be used as a community entry point and to propagate a STEM programme as well as identify beneficiaries in these areas. They will also publicise these initiatives. What about Brands and Beyond? Brands and Beyond Ltd. will help with the fundraising activities of FGM-to-STEM. They’ll also coordinate a network of partners. In addition, it will be involved in creating publicity for the activities. Brands and Beyond Ltd. will also provide mentorship across the board.E

Maasai Elders blessing young girls who have undergone (Alternative Rites of Passage) ARP Program in Kajiado County organized by Amref Health Africa WATTS UP MAGAZINE JULY - SEPTEMBER 43


Key risks in African oil & gas projects financing

By watts up team

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frica is home to five of the top 30 oil-producing countries in the world. Eighty percent of its oil is produced by Algeria, Angola and Nigeria. It has proven gas reserves of 502 trillion cubic feet, and 90 percent of its gas is produced by Algeria, Nigeria, Libya and Egypt. The past decade has seen a dramatic increase in project financing opportunities for oil & gas projects in Africa. Examples Recent notable examples include the US$1.65bn multi-sourced financing of Vitol’s interest in the US$7bn oil & gas Offshore Cape Three Points (OCTP) project in Ghana and the US$4.7bn multi-sourced project financing for

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the Coral South FLNG project in Mozambique. These projects demonstrate that with the right sponsors and appropriate risk allocation among the project participants, it is possible to successfully finance large-scale oil & gas projects on a limited recourse basis in Africa. The award-winning Vitol OCTP project financing comprised four fully amortising debt facilities: a US$400m UK Export Finance (UKEF) facility, a US$300m International Finance Corporation (IFC) facility, a US$180m Multilateral Investment Guarantee Agency (MIGA) covered facility and a US$470m uncovered commercial bank facility. The financing represented a

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number of notable firsts, such as the first time a European export credit agency supported a financing structure of this kind and the first time UKEF provided a direct loan to an African nation. Its innovative structure combined aspects of a standard project financing, such as long-term tenors based on take-or-pay offtake contracts, reserve accounts and the grant of security over borrower’s rights, with aspects of a reserve-based lending model, such as annual borrowing base redeterminations. Allocate and mitigate the multitude of complex risks In order to successfully achieve financial close on a project financing for a large scale African oil & gas project, the host government, sponsors, lenders and their advisers are all required to work closely together to identify, allocate and mitigate the multitude of complex risks that these projects face. Due to the large amounts of capital required to develop and construct these projects, which are often located in challenging jurisdictions, either geographically or geopolitically, sponsors will typically look to include export credit agencies (ECAs) and multilateral agencies as key elements of their financing plans. As these financial institutions find their roots in politics, rather than commerce, they possess a variety of tools that are not available to commercial entities alone. Political protection ‘halo’ effect Among the most important of these tools is the ability to offer financial terms that are more generous than


FINANCING ENERGY

their commercial counterparts, as well as the ability to provide both ‘hard’ and ‘soft’ political protections for the projects in which they invest. These political protections create a ‘halo’ effect that is attractive to both the commercial banks that lend, alongside the ECAs and multilateral agencies, and also to the equity investors in the project. An oil & gas project will share many of the same features that can be found in other types of project financings, but there are a number of risks that are specific to this sector. One such specific risk is commonly referred to as ‘reservoir risk’. Reservoir Risk Both equity investors and lenders to an oil & gas project will need to carefully diligence the quantity and the production profile of the project’s hydrocarbon reserves. The viability of the project financing at the outset will be determined by establishing that there are sufficient reserves that can be extracted to produce hydrocarbons for sale to generate sufficient revenues to repay the project debt and provide a return to the equity investors. Lenders to the project will employ an independent reserves consultant to conduct diligence and establish the level of proven reserves, probable reserves and possible reserves in the field. Lenders will typically seek to ensure that their loan will be repaid no later than the date when 25-30 percent of the proven reserves remain available; this percentage is commonly referred to as the ‘reserves tail’. Construction risk As with every project financing, lenders will be focused on the construction phase of the project, as during this phase the project’s cash flow is all outgoing, and the lenders’ first ranking security package over the project’s assets is of limited value before the project is completed. As lenders are

typically unwilling to assume construction risk – the risk that the project will not be constructed on time, on budget or to the required specification – in the absence of the availability of a single turnkey wrapped EPC contract, lenders have traditionally required sponsors to provide completion support in the form of either a completion guarantee or a debt service undertaking.

“Lenders will

typically seek to ensure that their loan will be repaid no later than the date when 2530 percent of the proven reserves remain available; this percentage is commonly referred to as the ‘reserves tail” Either form of support will remain in place until the project can pass a ‘completion test’ – when the project has demonstrated to the satisfaction of the lenders that it can generate revenue on a reliable basis. A key element of the negotiation of the project financing package will typically focus on the terms of the completion-testing regime. Difference between power projects and Oil and Gas projects Oil & gas projects also differ from other large-scale infrastructure projects, such as power projects with long term take-or-pay power purchase agreements, in that the revenues that a project will generate will fluctuate over time. A project may benefit from a long term take-or-pay sales agreement in respect of its gas offtake, but typically lenders would be expected to take

commodity price risk on the oil offtake, as the oil produced by the project is traded on international markets. Cash sweeps In return for lenders agreeing to take this commodity price risk, they will often require a ‘cash sweep’ from the project accounts, which will take the form of a mandatory prepayment of the debt facilities using the proceeds of excess cash flow that might otherwise have been distributed to the shareholders. This mechanism is generally accepted by sponsors on the basis that such excess cash flows will only arise in a scenario when the price of oil or gas is advantageously high, and such mandatory prepayments will guard against any future down-cycles in the oil price, which could leave the project with insufficient revenues to make scheduled debt payments.E

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I BELIEVE

I am grateful to be the Women in Energy Awards 2018 Entrepreneurship Award winner. It is an honor that has motivated me and my team to work even harder to create more opportunities for women to make an impact in the energy sector, especially in Kenya”

Entrepreneurship is just one section of the hustle to solve energy poverty. We need to work harder for a holistic recognition. We want our organisation to be seen as one that has played an important role in the development of the sector. This won’t come easily, we have to work hard and ensure that we attract and build more women entrepreneurs in the eco system.”

Elana Laichena Entrepreneurship Award 2018

We created Powah hub, the first Sarah Basemera – solar run container with Entrepreneurship access to internet, phone charging, Award winner solar home systems and computer 2019 access. It’s fully transferable, developed and made in Uganda. I really want to focus on creating innovations by Ugandans for Ugandans, and develop an innovative environment. This is where I wanted to make the most impact, creating innovative solutions in the energy sector

Esteeri Kabonero – Power Gaga winner 2019

As the founder of Women in Energy and Extractives in Kenya (WEX), we are dedicated to promoting the development of women directly and indirectly affected by exploitation of the extractive energy. Lucky Ogutu– Power Gaga Award Winner 2018

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FOCUS ON NUCLEAR

Africa sees nuclear power as drought hampers continent-wide electrification goal THOMSON REUTERS FOUNDATION

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n recent years, at least seven other sub-Saharan states have signed agreements to deploy nuclear power with backing from Russia, according to public announcements and the World Nuclear Association (WNA), an industry body.

quent, Ethiopia Government worries about betting on an abundance of water for the country’s main source of electricity. With rivers sometimes drying up, nuclear technologies have “environmental” advantages over others.

Ethiopia’s memorandum of understanding on nuclear cooperation with Russia paves the way for the construction of a nuclear power plant and a research reactor in the long term, The East African country has been electrifying rapidly to meet rising energy demand and its goal to become the biggest power exporter on the continent while sticking to pledges to remain a low emitter of greenhouse gases.

With sub-Saharan Africa’s 48 countries generating the same amount of power as Spain despite a population 18 times larger, the option to bring electricity to their people on a bigger scale using nuclear energy is gaining momentum.

Under a 2015-2020 development plan, Addis Ababa wants to raise power generation to more than 17,000 megawatts (MW) from just over 4,200 MW now, mainly by harnessing hydro, wind and geothermal sources.

Like Ethiopia, emerging nuclear states Sudan, Kenya, Uganda, Nigeria, Rwanda, Zambia and Ghana have signed agreements with Rosatom, Russia’s state nuclear corporation. Most contracts have been made since 2016.Sub-Saharan nations have shown an interest in nuclear because coal is scarce and Nigeria and Tanzania’s large volumes of natural gas tend to be exported for profit, said Jessica Lovering, co-author of a 2018 report, “Atoms for Africa,” from the U.S.-based Center for Global Development.

Its most ambitious project under construction is the Grand Renaissance Dam on the Nile River, which will churn out 6,000 MW at full capacity when completed within the next four years, according to Ethiopian Electric Power, the state-owned utility. But as droughts become more fre-

Nearly 6 out of 10 sub-Saharan Africans still lack access to electricity, according to World Bank data.

Booming populations and international pressure to curb greenhouse gas emissions also play a role, she added. Ethiopia, for instance, has pledged under the Paris Agreement on climate change to curb its already meager emissions by two-thirds from business-as-usual projections by 2030. Ramping up nuclear power may be a carbon-neutral option but presents dilemmas such as the high cost of building a plant and setting up supporting infrastructure, including safe management of nuclear fuel, Some political observers are concerned about the prospect of nuclear reactors backed by Russia in some countries with rebel groups and weak government institutions. An Africa-based Western diplomat, who asked to remain anonymous, doubted Russia’s assurances it will collect nuclear waste from projects it helped establish: “You could end up with very unfortunate situations in parts of Africa . . . if you have a decaying nuclear power plant overrun by rebels, with waste that’s not going away.” E

With sub-Saharan Africa’s 48 countries generating the same amount of power as Spain despite a population 18 times larger, the option to bring electricity to their people on a bigger scale using nuclear energy is gaining momentum.

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SUSTAINABILITY NEWS

Growing Flowers Sustainably By Cynthia Wanjiru

“Geothermal heating has

managed to tame diseases such as petal botrytis and downy mildew”

Oserian Staff receiving the Renewable Energy Category Award from PS. Eng. Andrew Kamau during the EMA Awards 2019

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aivasha, Kenya, Kenya’s largest flower exporting company, Oserian Development Company has hit yet another milestone by launching its solar energy power plant with a capacity to generate 1mw. Integrated with the existing geothermal power, the firm will now produce sufficient renewable energy for consumption by tenants and residents of the Two Lakes Industrial Park. Combined, both plants have a capacity of 3.5 mw. Since the flower farm embraced heating of greenhouses with geothermal energy in 2001, it has remained the only one in Africa and among the largest in the world, to use this power in flower production. Oserian runs the

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SUSTAINABILITY NEWS

house, an innovation that has seen reduction in fossil fuel from Kshs 400,000 to 30,000 monthly, a massive savings in terms of costs and energy consumption. Within one year of introducing the electric vehicles, the company has been able to save Ksh. 1.4Million on diesel. The success of this venture has seen the company mull converting their fleet to a hundred per cent electric in the future as the company moves closer to being a carbon free business in 2020.

Oserian geothermal heating system

In partnership with biological control companies Madumbi and Andermatt of Switzerland - Oserian produces 10 Million beneficial insects every week to eat predatory bugs and reducing use of chemicals and labour, and contributing to a safer chemical-free greener environment.

world’s largest geothermal powered greenhouse and flower pack house. By using geothermal heating, it has managed to tame diseases such as petal botrytis and downy mildew, two of the greatest threats to flower production while minimizing fungicide spray in the green houses and reducing cost of energy, leading to substantial contribution to a greener planet. Thanks to geothermal, Oserian is able to grow exclusive specialty roses like Queen of Africa and Vuvuzela which require unique heating not possible under different heating systems, according to Hamish Ker, former long serving technical director with the farm. A year ago Oserian introduced electric cars, known as tugs that are geothermal powered to transport flowers from the greenhouses to the pack-

Oserian has also introduced hybrid sheep that are used to keep the grass short around the greenhouses, replacing the diesel mowers. The hundreds of sheep move paddle to paddle clearing grass, dropping waste that turns into manure, removing cover that harbor insects breeding grounds essentially contributing to less predators therefore less chemicals to control them.

The electric cars, known as tugs, are geothermal powered and are used to transport flowers from the greenhouses to the packhouse

“This win is testament to the commitment we have for matters green energy especially in our daily operations and we are happy someone has recognized the effort and investment”,” said Mary Kinyua the Director of Human Resources and Administration at Oserian E

Oserian hybreed sheep that are used to keep the grass short around the greenhouses, replacing the diesel mowers WATTS UP MAGAZINE JULY - SEPTEMBER 49


SUSTAINABILITY NEWS

The marketer who links up energy investors

Benita Bageire, the founder of Albertine Oil and Gas Services Limited is a living example that women can indeed excel in energy sector. Her determination and passion in this sector is consummate. She speaks to Kelvin Mabonga about her journey in the energy sector.

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hat motivated you to join the energy sector? My passion for energy began way back when I went to the United States for further studies. I had the opportunity to meet people from oil producing countries particularly from the Middle East. I also had friends from Nigeria and other African countries who were in oil and gas business. They gave me insights into the sector, and with the discovery of oil in Uganda, my dream solidified. How did Albertine Oil & Gas Ltd come into existence? First, I wanted to do supplies in oil and gas but I was uncertain due to the health risks associated with it. I did not possess any technical skills that most people deemed necessary to venture into this kind of business. It was a daunting task but I took the challenge head on and eventually formed Albertine Oil & Gas Ltd with the help of Norwegians who had been in the business for a while. In addition, I attended many capacity building conferences and also did plenty of research so as to understand the sector well. What does Albertine Oil & Gas Ltd do? Our main service is corporate representation and consultancy in the energy sector. This is basically helping international companies to get established in Uganda. Our company partners with international firms to help them run their businesses smoothly in Uganda. The Ugandan government has put in place policies that ensure companies looking to do business in the country need to have local content in terms of personnel and other resources. These companies also have to be registered with the National Supplier Database. It is therefore easier for any company coming to Uganda to partner with a local firm than set up its own. What were you doing before you joined energy sector? I am a marketer by profession. I was in advertising and marketing industry. I also worked for a cement company as a sales representative. You were recently nominated in the Upstream Oil and Gas Awards Conference non-technical category, how did this make you feel? I felt honored and recognised. However, I wish the energy industry would be demystified so that it is open to people of other professions and not only to those with technical skills. What is your take on the discovery of oil in Uganda? I feel that oil should be used as a means to an end which means getting resources from oil to improve agriculture, health and infrastructure. The sector is picking up very fast because it is a new thing here. People are eager and have high expectations of this discovery. What advice would you give to those who want to venture into the energy sector? Energy sector calls for great passion, determination and commitment for anyone to thrive. Energy is perceived as a sophisticated field especially by people in non-technical professions. There is need to read widely; attend conferences and workshops in order to have a better understanding. It is also important to connect with people already working in the industry so as to establish yourself better. E

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SUSTAINABILITY NEWS

on Sustainable Cities and Communities, as well as 12 on Responsible Consumption. Innovation and process optimisation have continued to pave the way to new and better solutions for a cleaner production, efficient resource management and waste management. It is also important for industry as a significant stakeholder in the planet’s future, to take the lead in effecting and normalising clean energy use. The Association has consistently championed the adoption of critical tenets of sustainable development and green growth towards actualising a green economy, which meets the current generation without compromising the ability to meet the needs of future generations. KAM has been at the forefront of promoting a green economy through energy, efficiency, water efficiency, green financing and waste management. The Centre for Energy Efficiency and Conservation (CEEC) has been running energy efficient and conservation programmes since it was established in 2006 in conjunction with the Ministry of Energy and Petroleum.

Phyllis Wakiaga Kenya Association of Manufacturers CEO

Energy conservation is everyone’s game By Cynthia Wanjiru

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ndustrialisation is key to our economic sustainability. As a matter of fact, industry plays a critical role in job creation, poverty eradication and economic growth, the same needs to be replicated in its role in promoting a cleaner and safer environment.

KAM also conducts water and waste water audits which helps in efficient water utilisation and conservation, and reuse of wastewater after sustainable treatment. Through the Sustainable Use of Natural Resource and Energy Finance (SUNREF) Programme, KAM has been providing financial solutions to green energy initiates, and with the aim of mitigating climate change. And finally, there is a waste management solution that looks at addressing behaviour change and economic inequality which lie at the heart of our waste problem. It is worth noting that efforts in energy conservation by industry are paying dividends as evidenced by the savings reported over the last 15 years have accumulated to Kshs 14.7 Billion. KAM has also undertaken 24 water audits and in regard to green financing, through the SUNREF programme, to date 36 projects in energy efficiency and renewable energy efficiency have been financed in East Africa for at least $70M. From last year’s Energy Management Awards alone, participating companies demonstrated savings of KSh624 million, with a reduction of 26,994 tonnes of CO2 emissions.E

It is on this note that industry is making strides to ensure environmental protection in its practices in line with Sustainable Development Goals (SDGs) 3 on Good Health, 11

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ENERGY OPINION

Kenya positions itself in the Future of Energy in East Africa By Greg Coleman

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enya’s Big Four agenda is exciting and challenging. The future is rosy for Kenya as the Big Four Agenda is well on its’ way to becoming reality.

President Uhuru Kenyatta has constituted the National Development Implementation and Communication Committee whose key mandate will be to supervise the execution of government programmes. In particular, the Committee will be required to ensure effective implementation of the Big Four agenda projects — food security, manufacturing, affordable housing and affordable healthcare. Everyone should recognise that low cost reliable energy is fundamental to achieving these goals/projects. However, many challenges exist to achieve the Big Four. Project delivery, financial discipline and integration of the projects to maximise synergy will be essential for success. Food security requires low cost and reliable energy as does globally competitive manufacturing and affordable housing for Kenyans. Kenya is blessed with substantial and diverse potential sources of energy. Hydro, geothermal, solar and hydrocarbons are all available in substantial quantities. Each brings its own challenges in terms of finance, customer pricing, environmental and community impact. In addition, there is the additional consideration of the regional agenda as Uganda is developing its hydro and hydrocarbon resources, Ethiopia is developing its energy resources and major Liquefied Natural Gas (LNG) projects are being developed in Tanzania and Mozambique. In total, $300-400 billion dollars will be invested in energy and infrastructure projects in the region in the next 10 years. On a global scale, this amount of investment is important but not without precedent. China, Australia, Qatar, the United States a nd many other countries have undertaken and successfully completed similar investment programs. More is

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needed to supply the world’s growing energy needs. The additional challenge of climate change and its impact on the planet is now becoming a significant challenge to human beings the world over. In order to meet the Paris Agreement to limit carbon dioxide emissions we will require new technology and disciplined implementation of new projects. Businesses in the region will have significant opportunities to gain new business by participating in these investments as promoters, suppliers and financiers. Foreign investment will be critical to leverage local financial capacity. Foreign investors will have their own requirements for limiting environmental and social impact. In all cases, having trusted local partners in the form of governments, suppliers and leaders will be critical to success. The impact of these investments on the local and global environment will need to be taken into account. Use of water, household and hazardous waste management, preservation of biodiversity and air quality all must be dealt with so as to minimize the impact that new infrastructure will have. Specifically addressing Kenya’s hydrocarbon resources, the development of the Lokichar oil discoveries by Tullow and partners has commenced. Initial pilot production with produced oil trucked to Mombasa for sale has demonstrated the impact even this minimalist initial phase has on the local community. Trucks moving through communities over such long distances cause significant inconvenience and risk to those communities and travellers on the roads. The Final Investment Decision for Lokichar is expected in late 2019 and will require $2.9bn USD for this initial phase. Further investment phases will require confirmation that the reserves are available and that they can be commercially developed. To reach full production levels of 100,000 barrels of oil per day will require several bil-


ENERGY OPINION

for the Lokichar Oil Development will be provided by Tullow and partners. Cost recovery and profit share are allocated according the production sharing agreement that has been approved by the Government of Kenya. This contract remains confidential but follows typical international industry form. Local suppliers of steel, cement, waste management solutions, energy supply, food and consumables should create long term prosperous businesses.

lion USD of further capital investment and development of more export capacity at Lamu and a viable Kenyan and regional market for hydrocarbon products. Local people expect to benefit from the opportunities that should be created by a significant development of hydrocarbon resources in their region. However, expectations must be managed. International investors require international expertise in project management, construction activities and commercial interactions. Support for local businesses should be part of the conditions of satisfaction in order for these projects to succeed. This can take the form of 50/50 partnerships, international training and opportunities for the best employees, suppliers and partners.

Developing Kenyan talent so Kenyans can be intimately involved in all aspects on the Lokichar and infrastructure developments across all of the energy sector is critical to the long term sustainability of these projects. Local trades (such as welding, drivers, electricians) and apprenticeships are important but being involved at the highest level of these projects and the critical decisions which will inevitably be taken is important for the country and its global competitiveness. Kenyan businesses need to be at the table when decisions about capital allocation, partnerships and international deals are being considered. The writer is a Trustee of the Virtual University of Uganda. Also Chairman and Managing Director of Petromall Ltd. E

Demonstrating international competitiveness in technology and talent will lead to opportunities for Kenyan business around the world. This could be in the form of waste management technology, water utilisation, project management, community involvement and more. The need for integrated infrastructure along the LAPSSET corridor presents many challenges. The Lamu port development is a major infrastructure investment project which apparently has many challenges even at this early stage. Financial management and project delivery require adjustments to the delivery model and involvement of world class expertise to ensure quality, timeliness and cost discipline. Lastly, financial benefit to all stakeholders is critical. Achieving a fair and transparent allocation of the proceeds from revenue generated by these projects is a huge challenge. Governments become exposed to challenges about allocation and balancing the national good with the impact on the local communities. International investors have many global opportunities and need to persuade their investors that the invest returns are commensurate with the risk being taken. Capital investment

Greg Coleman, CEO Petromall addressing, journalists during the Great Energy Debate at Movenpick Hotel Nairobi

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WHEN COAL COMES TO PARADISE BY DANA ULLMAN

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AMU, Kenya—China’s ambition to become a world leader in climate change has led its government to pursue an ambitious initiative to reduce emissions domestically. Amid massive reforms to switch to cleaner energy sources such as natural gas, China has barred new coal plants in 10 regions and proposed suspending construction of more than 100 coal plants last year. China’s carbon-dioxide emissions grew by 2.3 percent in 2018, and are set to peak in 2030. (There has been some easing of restrictions, Bloomberg reports, indicating how coal-dependent China remains.) Still, the growth is slower than climate researchers expected. With investments in alternative energy increasing and domestic demand for coal-fired power dropping so quickly, China has been left with a surplus of labor, technology, and equipment. To remedy this, China’s coal industry has been encouraged by the government to look to outside markets for its survival. While China is on track to meeting its Paris climate agreement targets domestically, it continues to invest in and profit from coal power projects across the world. Domestic restrictions do not apply to projects abroad, and China has capitalized on this exception by exporting its surplus of coal-related equipment and technology to countries desperate for industry, undermining a global push to phase out coal. China has invested in coal projects in 34 countries, 11 of which are in Africa, according to data compiled by Global Energy Monitor’s Global Coal Plant Tracker, an industry watchdog. China invested in eight of those African countries, six of which have no existing coal-related infrastructure, after its commitment to the Paris climate agreement in 2015. Once completed, these projects would generate 102 gigawatts in coal power globally, locking countries that currently have little to no coal capacity into coal dependency, according to a statement from Urgewald, a German environmental rights group. Lamu Island, 200 miles north of the Kenyan port of Mombasa, is one of the places that China’s industrial surplus is poised to transform. It has become the contentious centerpiece of the government’s ambitious Kenya Vision 2030 plan, which aims to transform the country into

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FOCUS ON COAL

East Africa’s industrial touchstone. As far back as the 1970s, plans for a massive multinational infrastructure project have been on the table, but they have never materialized due to lack of funding. Today, thanks in part to Chinese loans, the newest incarnation is the Lamu Port-South SudanEthiopia Transport Corridor (LAPSSET), which includes a port and coal plant in Lamu County. According to the LAPSSET’s Environmental and Social Impact Assessment, Lamu County was chosen for its remote location and accessibility for coal shipments. Since Kenya has no infrastructure in place for the transport of coal, South Africa has been granted a contract to import coal to the site until Kenya can build a railway from Lamu to Mui Basin in Kitui County, over 200 miles away, where concessions have been granted to Chinese companies to begin coal mining. Critics of the project, such as Raya Famau, a Lamu resident and self-described “land defender,” argue that the long-term costs of pollution, water contamination, overpopulation, and imports far outweigh saving a few cents on electricity. Famau saw the effects of coal firsthand when she and other community members traveled to Mpumalanga province in South Africa—where coal for the Lamu plant will be shipped from—and witnessed the effects of coal mining on the local community’s quality of life. “We cannot have this coal project in Lamu,” Famau insists. “In the DRC [Democratic Republic of the Congo], Uganda, Ghana, South Africa, I’ve come to see our struggle as women is the same, especially when it comes to land rights. Women are homebuilders, mothers, wives, [and] farmers. Everything. When you are destroying our livelihood, you’re destroying us.” With the increased international attention on coal’s spotty track record, many critics have argued that there is no such thing as “clean coal.” The National Institutes of Health call coal-fired power plants in the United States “the biggest industrial sources of mercury and arsenic in the air.” Testifying at a tribunal hearing on LAPSSET, Lauri Myllyvirta, a coal and air pollution expert at Greenpeace, said “the project would emit five to 10 times more air pollution than new coal plants are allowed to emit in China.” Chinese Premier Li Keqiang has himself acknowledged that “environmental pollution is a blight on people’s quality of life.” But transferring that blight from China to other countries seems less of a concern. According to data collected by Global Coal Plant Tracker, China has more than 200 coal projects in 34 countries. Edward Cunningham, a specialist in China’s energy markets at Harvard University, told NPR in April that China is developing or planning over 300 coal plants worldwide. Many of these projects are part of China’s Belt and Road Initiative (BRI), which is expanding infrastructure projects across coastal regions worldwide.E The June 26 ruling by the National Environmental Tribunal cancelled the license given to Amu Power by the Amu Power has 30 days to appeal the decision and restore its environmental and social impact assessment license. Alternatively, it can conduct a new assessment in the hope of being awarded a fresh license. There is need for a secure baseload energy mix in the country to ensure security of energy sources. The government must respond with vigor and urgency in their public participation drive. From Editor’s desk

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INNOVATION

Fasten your seatbelts. An electric ride awaits you

The motor vehicle that we have is three times as powerful as the original combustion engine vehicle. It costs about Kshs.3.5Million for full conversion” Filip Gardler CEO Opibus Filip Gardler CEO Opibus

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INNOVATION

Filip Gardler’s passion is contagious as he takes us through the vision of his young company. In 2016, Filip together with four of his friends founded Opibus as a student start up back home in Sweden. They moved to Kenya after completing school in 2017 to develop, produce and install electric drivetrains for a range of vehicles. Mr. Gardler, the Chief Executive, spoke about their journey to CLIFFORD AKUMU

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hy did you decide to venture into electric mobility? With the Sustainable Development Goals (SDGs) at hand and climate change adaptation agreements, the world needs to act very fast to avoid an impending catastrophe. It cannot be business as usual when it comes to transportation which is a major cause of air pollution. Modern living cannot do away with transportation, hence the need to focus on clean mobility initiatives. Tell us more about yourself and why you chose Kenya as a launching pad? I was born in Sweden 27 years ago. I am passionate about environmental and social change and I’m committed to do my part towards a more sustainable world. I have master’s degree in renewable energy and in environment and technology. My philosophy is to spend time making a positive impact on other people’s lives. And that is what I love doing most. I first came to Kenya in 2016 and realised it was the gateway to East Africa in sustainable development and thought that I should come and be part of that development. We started developing the technology in Sweden in 2016. We moved to Kenya in June of last year and opened our production facility. Is electric mobility sustainable in the context of Kenya? The bulk of electricity in Kenya comes from renewable sources, which is a great way to reduce carbon emissions. It is also important because electric

vehicles do not have particle emissions from CO2 which affects global warming and the health of people living in cities. It is also the best way to increase the demand for cheaper energy, meaning we can put up large scale renewable power plants with solar, wind, hydro and geothermal. What measures should the government take to spur growth in electric mobility? Deployment of electric vehicles needs some conducive policy regulations, subsidies that will make it cheaper for the end user to acquire e-vehicles. Why would such vehicles be taxed the same as the highly polluting vehicles that are affecting the health of citizens? In European countries, for example, the government has realised the importance of e-mobility and are heavily supporting subsidy and regulation initiatives. What does it entail to undertake an e-mobility concept in developing countries? There are a few important factors that must be at play while implementing a new concept like e-mobility in the market. Apart from the technology there is also need to have in place regulations, policy and capacity. Tell us more about the “conversion concept” in your production of e-vehicles and the process? In a bid to attract the Kenyan consumers and avoid the hurdles involved in acquiring electric vehicles, we decided to adopt the conversion concept. We wanted to use the already existing vehicles on the fleet and have them as a

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INNOVATION

platform for sustainable mobility. We take a regular vehicle and remove the fuel tank and gear box. We then mount electrical boxes, connect everything together and make sure that they are functional. The components in the electric drivetrain are mounted in water proof boxes, allowing for the same water submergibility attribute as the original model. A converted offroad vehicle will therefore still be able to undertake river crossings. How does the system work? The system is designed to be modular with high adaptability, allowing for upgrades such as adding battery capacity after the conversion is done. With the design of the system in mind, it is even possible to move the whole drivetrain, including batteries and power electronics to a new vehicle. This technology makes it possible to invest, not only in one vehicle but a drivetrain that lasts through several chassis. What is the landscape of electric mobility in other countries and lessons that Kenya can learn? In Norway, for example, nearly 60 percent of vehicles sold annually are fully electric. This is because the government has put in place subsidies to support the sector. The Electric Vehicles (EVs) do not have any maintenance need and this reduces the cost by up to 90 percent for motorists. This means that, on average, an electric vehicle user spends about 80 percent less in cost than one using fossil fuel vehicles.

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So why not pay a little bit more for EVs that will pay off in a few years in terms of cutting costs? The more you drive your vehicle, the larger your savings. Take the example of matatus which drive long distances in a single day, if they choose an investment of Ksh3 Million to go the electric way from day one they would save millions in terms of costs. How much does it cost to own a converted electric vehicle? Currently we work with large vehicles weighing about 3.5 to 4 tonnes which need quite powerful systems. The motor vehicle that we have is three times as powerful as the original combustion engine vehicle. It costs about Ksh3.5million for full conversion. Why are wildlife conservancies keen on electric vehicles? The tourism sector has been our biggest client. Tourists nowadays prefer electric vehicles. One advantage is that since they are used in wildlife habitats, the EVs have no impact in terms exhaust fumes from the roaring fossil fuel powered engines. When driving in the Savannah using the electric vehicles, the animals don’t react because there is no disturbing engine sound.E

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I BELIEVE

Our determination as WREA is to equally serve the different needs of all the women existing in Uganda’s renewable energy space, who have made us achieve our short term success. Besides, we want to see a higher uptake of clean energy technology especially with women since they are the main consumers of biomass energy in the rural areas. We also want more investors to back clean energy-oriented start-ups while contributing to the mentorship of women who more often than not are direct beneficiaries of this programmes. Despite WREA being a young organisation, it has so far transformed the lives of 15 young women who were trained on various business skills and the need for financial literacy through the making and selling of briquettes.

WREA – Women Group of the Year winner 2019

We have been at the forefront in creating awareness about clean cooking methods such as use of biogas and fireless cookers which have been adopted by many people in the community. Besides, the group has been training women on the best and modern methods of farming.”

Lari Women – Women Group of the Year winner 2018

The multitasking nature of women has had an added advantage to discovering and exploring more experiments and use of different energy choices available in the market. I personally encourage every woman to get more involved in energy because it’s where we gain more power to run the world, we are women and we can do it right in the energy sector”

Ikou Hellen Rose, Winner Student Award category 2019

We need to encourage young girls and women to pursue careers in STEM disciplines in order to address the gender gap in these technical fields. Professionals should offer themselves as role models and mentors to them and encourage them to take up the technical subjects that will make them acquire skills required in the energy sector.

Irene Ronoh, Winner Student Award 2018

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WOMEN IN ENERGY KENYA 2018 SPEAKER’S NOTE

“Women should keep asking questions and knock on doors to ensure that the local market is given priority over the international one”

Benita Bageire

CEO Albertine Oil and Gas “Women are critical players in sustainable development ,climate change and energy which are important ingredients in the development of our economy”

“We came up with farming TV station to effect change in the agricultural sector which is a main component of food security in the big 4 agenda”

Director of Economic Planning State Department for Planning

CEO Standard Media Group

Catherine Mwoki

“Women and girls are the first ones to get the health problems that come with smoky kitchens as they are the ones that do most of the cooking”

“The ministry desires that every Kenyan access electrification by 2022 and modern cooking by 2030”

Peter Ngura

Eng. Paul Mbuvi

Director, Excellence Centre-AMREF

Senior Assistant Director in Renewable Energy Min. of Energy

“Girls make choices based on the gender stereotype belief that STEM subjects for boys and so they end up choosing other subjects”

Dr. Kagume

Gender Consultant

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Orlando Lyomu

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“Women should not give away their power of learning and should endeavor to get skills in technology”

Marion Moon

Agricultural Specialist


“Women should stop sitting back and waiting to be asked, get up speak up, get involved and have a voice”

Greg Coleman

WOMEN IN ENERGY UGANDA 2019 SPEAKER’S NOTE

CEO Petromall

“Women have solutions to their own problem so they shouldn’t sit back and complain”

“Having access to modern energy will help us to eradicate poverty in our homes”

Nancy Kalembe

Dr. Victoria Nalule

CEO & Founder Mbalimbali Ltd

M.D African Mining and Energy Initiative

“Women should learn to take a risk, sacrifice, and discover their strengths so as to bring out the best of them”

Nana Kagga

Petroleum and Chemical Engineer

“The demand for clean energy in Uganda is high while the supply is low and therefore we should take advantage of these opportunities”

Ms. Sumaya CEO Wekeza Energy

“Women are the best finishers on goods because they are patient”

“Women should be guided by 3 Cs; Competence, Confidence & Commitment to thrive in their career”

Dr. Tom Buringuriza

Mrs. Doreen Wandera

Country Manager, Armour Energy ltd

Board Member, Petroleum Authority of Uganda

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Transforming the Nation’s economy Our goal is to provide reliable, efficient and effective electricity nationwide for sustainable socio-economic development

We design, construct, own, operate and maintain high voltage electricity transmission grid and regional power interconnectors KAWI Complex- Block B, South C P.O.Box 34942-00100, Nairobi. Tel: (+254) 20 4956000, (+254) 719 018 000 Website: www.ketraco.co.ke E-mail address: info@ketraco.co.ke


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