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

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

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

This forum has been closed.
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.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs