News / Africa

Kenya’s Investment Climate Generates New Energy

The governor of Baringo County, Benjamin Cheboi (left), was joined by USAID associate administrator Mark Feierstein (blue shirt) in breaking ground for a new power plant in Kenya. (Courtesy USAID)
The governor of Baringo County, Benjamin Cheboi (left), was joined by USAID associate administrator Mark Feierstein (blue shirt) in breaking ground for a new power plant in Kenya. (Courtesy USAID)
Reuben Kyama
President Barack Obama launched the Power Africa Initiative last June to boost electrical power generation in Kenya, Ethiopia, Ghana, Liberia, Nigeria and Tanzania. With support from the World Bank and the African Development Bank, the goal is to add more than 10,000 mega­watts of clean, efficient electricity generation capacity for 20 million new businesses and households in sub-Saharan Africa with some access to electrical power.
 
In Kenya, USAID has fostered a public-private partnership between the Cummins Cogeneration Kenya Limited, a local firm, and the Government of Kenya to develop 12-megawatt biomass-fueled, on-grid electricity generation. 
 
Officials from the United States Agency for International Development (USAID) visited Kenya last week to evaluate the progress of President Obama’s initiatives to foster public-private partnerships. These initiatives underpin the U.S. and Kenya’s shared development goals.
 
More profitable than charcoal
 
Three USAID officials visited a biomass energy plant in Marigat, Baringo County, about 220 kilometers northwest of Nairobi. The USAID assistant administrator for Africa, Earl Gast, spoke about the plant, which is run by Cummins Power. Gast said the people in the community used to cut down the trees to make charcoal but now sell the wood to the plant which converts it into steam to generate electricity.
 
“We estimate that through this process they will earn four times of what they are earning now for the same amount of wood that they are cutting now,” he said. “So, it’s very lucrative to them. Actually, it’s lucrative to the villages and to the people of Kenya throughout because that power that’s being produced goes to the grid and benefits the local community as well as national community.”
 
Listen to Reuben Kyama's interview with Earl Gast
Listen to Reuben Kyama's interview with Earl Gasti
|| 0:00:00
...    
🔇
X

President Obama wants to focus on smaller communities where the U.S. and Kenyan government and private business can lift people out of poverty. Gast said the Baringo project can be repeated in other parts of Kenya and Africa.
 
“These small biomass projects can help immediate supply of electricity to communities and provide economic opportunities to them by selling the fuels.” He said power is transformational. “it means that people have access to health care because equipment can run.
 
Light is a key to economic growth
 
“It means people have access to lighting and that means children can learn and read at night. And, of course, power can contribute even more for economic growth. It means business can operate and can produce their products at a very reasonable and competitive price.”         
 
Gast also described some other Power Africa projects in Kenya’s future: Wind parks in Kinangop and Lake Turkana. He estimated they could generate 450 megawatts of power.
 
He said Kenya is blessed with natural resources. USAID also signed a contract last year with Geothermal Development Corporation to further support the development of a geothermal project.
 
“I know your President has set some very ambitious targets for power generation, some 5,000 megawatts,” Gast said. “A lot of that will come through clean energy – geothermal energy – and so we talked about ways of moving that forward much more rapidly. We hope to be able to do that on some of the geothermal fields over the next year here in Kenya.”
     
Kenya is better off than the five other targeted countries in terms of identifying private partners with good credit, Gast said, adding that finding private partners with good credit is essential.
 
“That’s probably one of the biggest deterrents across Africa and so we are exploring with other development partners like the African Development Bank, ways of shoring up the credit-worthiness of the off-takers to include providing partial risk guarantees and other mechanisms.”
 
Kenya is a good place to start
 
Kenya also has more experience with public-private partnerships, he said, like the energy projects going on in the country. Nairobi has become an African hub of energy activity.
 
The world’s largest manufacturer, General Electric – a company he said is worth $110 billion dollars - has Africa headquarters in Nairobi. Power Africa headquarters are also located in Nairobi.
 
“So, a lot of investors are waiting to see how it plays out. We have a saying in the U.S. which I think it definitely applies to Africa - that ‘success breeds success.’
 
“Once you have one investor coming in, proving high valuable power to the country but being able to make a reasonable profit and employing local people, you will see other investors as well and we are seeing that in the case of Kenya. We feel that this is a great place to be.
 
Beyond the legal issues of a public-private partnership for generating energy in Africa, Gast said USAID looks for a good climate that will attract private investors. And they have transaction advisors in all six countries to make sure each of the deals succeeds.
 
“With the transaction advisors working on each of the deals we will be able to see in real time where the bottlenecks are, and we feel that this is a proven model and it’s working quite effectively.
 
“For example with the 300-megawatt Turkana project, the critical constraint was on the grid and the grid management, and so we were able very quickly to develop a technical assistance package to help train people and put in place a better grid management so the deal could go through.”
 
China has become a major player in building Africa’s infrastructure in recent years. Gast replies to a question regarding comparisons of the two major world players in the world of African economic development.
 
“Well, I am not familiar with the way China operates its power deals. What we do is make sure that there is complete transparency. There’s got to be complete transparency because you got the private sector involved, you have got donors involved and you’ve got the government involved.”
 
Public-private partnerships are complex business agreements that demand transparency and constant monitoring, Gast says. If that happens, all of the partners – and the public they serve – can learn who earns the profits from the investment and who among the Kenyan public benefits from the services.

You May Like

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
South Africa Sees Male Circumcision as Way to Reduce HIV Infectionsi
X
November 28, 2014 3:31 PM
South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video South Africa Sees Male Circumcision as Way to Reduce HIV Infections

South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violence

The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.

All About America

AppleAndroid