Kenya

Opportunities in the Energy Sector

Africa Energy and Renewables

A little about us: Energy services company. Develop renewable energy projects. Act as local Reps. for OEMs Consult with local and international firms on Energy

in Kenya. Involved in Community Development projects.

A few facts

'08 econ growth 7% '09 econ growth 3% Population 38 MM On Grid: 18% Trade Blck: COMESA

Current Electricity Generation Hydro Diesel Geothermal

Misc generation Solar Wind Biomass

The Energy Sector

Current Generation capacity: 1,150 MW Planned Generation in 2018: 3,011 MW Growth Drivers:

Govt. Commitment to connect 1MM new consumers in 5yrs.

Growing economy Growing population Technology adoption including cellphones, TVs,

Computers etc.

Why will the additional capacity come from?

Large Hydro:

60 MW on Mutonga or River Tana. Est. cost $250MM

140 MW at Lower Grand Falls. Est. cost $600MM

Where will the additional Capacity come from

Small Hydro: 3,000 MW across the country.

Initiative to tea factories that often are located in ideal settings.

Feed in tariffs for IPP: $0.06 to $0.12/kWh

Geothermal

7,000 MW potential in the Great Rift Valley Currently 165 MW developed or under

development including Kengen and Ormat. Govt. Forming Geothermal Development Corp.

that will carry the exploration risk and lease out proven steam to IPP.

No published Feed in Tariff. - Negotiate

Coal

Govt. doing feasibility study for a 300 MW Coal Plant. Opportunities

Developing a coal berth at the port of Mombasa. Plant construction and operation Coal exploration – Govt. currently leasing out 8 coal

blocks around the country.

Solar

Average solar insolation btwn 4 and 6kWh per M²

Currently 500,000 homes have solar panels. Govt. using solar panels for remote schools and

clinics No Feed in Tariff on Solar yet “too expensive”.

Open to proposals though....................

Wind

Govt. believes there is 405MW potential

Wind Resource Map available: http://swera.unep.net/

Feed in Tariff : $0.09

N uclear

Govt. seeking an investor for a 500 MW to 1GW Capacity.

Construction time frame: Next 7 years. Arrangement: BOOT ( Build Own Operate

Transfer) Based on a 30yr PPA.

Other Opportunities

Infrastructure: Plans for 400 Km of 132 kV Plans for 450 Km of 400 kV Grid requires 60,000 transformers over the next 5

yrs. - Local Manufacture or import? Annual maintenance of 2,000 transformers. Meters? Smart Meters? Switchgear? Insulators?

etc.

Challenges

Information: Who? Where? How? What Price? Network. Google utility events on the continent and

attend. Linkedin.com USDTA US Embassy in Nairobi Kenyans in Diaspora Common sense AGOA MBITA

Challenges

Currency Risk: Hedge Transact in Dollars

Corruption Say no.

Culture Get a good local partner

Check references, visit the US Embassy in Nairobi.

Challenges

Political Risk Relatively stable. Get Insurance http://www.miga.org/

Cost of doing business Pretty high in Nairobi. Factor it into your models.

Payment Risk - significant Cash LC

Challenges

Legal Protection Get proper legal representation. That being said, structure your transactions with the

assumption that there is no legal recourse. Long legal process Tons of loopholes Disadvantaged from a local network perspective Expensive

Have Fun!

Kenya is a great place to do business: Food Culture Safari Indian Ocean Beaches Kilimanjaro and Mt. Kenya People. Don't sweat the small stuff:

Traffic, congestion etc.

Thanks

Joseph Nganga

jnganga@africarenewables.com

+1 704 804 4684

Developing renewable energy and energy efficiency projects.