Opportunities in the Energy Sector 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 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: Corruption Culture Hedge Transact in Dollars Say no. Culture Get a good local partner Check references, visit the US Embassy in Nairobi.

Challenges Political Risk Cost of doing business 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.

Developing renewable energy and energy efficiency projects. Thanks Joseph Nganga jnganga@africarenewables.com +1 704 804 4684 Developing renewable energy and energy efficiency projects.