The East African Energy Sector to Provide Great Investment Opportunities to the Private Sector

The East African Region is endowed with some of the largest Reserves worth of Extractable Energy. Ranging from Natural Gas, Oil, Geothermal, Wind, Coal, Hydro, Biomass and Hydro Energy.  It is therefore hard to imagine the two out of every three people in the Sub – Saharan Region do not have access to Electrify. Yes indeed 600 Million People across Sub – Saharan Africa Lack Access to Electricity.

But Energy is an essential ingredient of Economic and Social Development..A stark reality for the Sub – Saharan Nations who’s Economies are growing at an average of 6% to which installed capacity is struggling to keep up with Demand.

Investors should now be on the Lookout as the Countries across East Africa continue to roll out Various Pilot Projects to Curb the Energy Deficits. The Projects are being developed from Various Distinct sources for the Regions Energy Mix in Public Private Partnerships.  For the Electric Power Developments there is a Market Ready for Domestic Consumptions. Essentially the State power Distribution Corporations Enter Power Purchase Agreements with the Energy Consortium prior to Project Development.

Currently underway Construction of an Integrated power Grid   “the East African Power Pool” that will consolidate Cross border Power Export. The other great Incentive to the Energy Sector is with the Kenyan Geothermal Industry. Kenya, already the 9th   world’s Largest Geothermal producer with an Estimated 10, 000 MW of Geothermal Steam Energy reserves. Through its Ministry of Energy Kenya’s Government Undertakes the Initial stage of Exploration and Steam Field development which takes away the risk that most private investors do not want to take allowing them to come a later – more proven – stage in power plant Development and injecting the Power into the National Grid. This area of Development seen as an Accelerating trend for Kenya perhaps mostly stimulated by the Carbon credit the Country Earnings the Country from the Kyoto Protocol Treaty for Clean Energy Development.

The East Africa Energy Sector Provides Public and Private Investors with Lucrative Opportunities in Energy development from its Diverse Energy Mix. With that comes Great Market Opportunities for Local and International Service and Technology Providers with Expertise in Energy and Energy Infrastructure Development.

Diverse Energy Commodity Portfolio

Following a String of Massive Oil & Gas Discoveries in the last five years, East Africa has emerged as a Global Hydrocarbon Power house and one of Last World’s Oil & Gas Frontiers. The Discovery puts East Africa’s Aggregate Natural Gas Reserves at 170 Trillion Cubic Feet Proven, 10 trillion Inferred and over 7.0 Billion Barrels of Proven Oil reserves in addition to 3.5 Billion barrels inferred. Discoveries and Reserves Cumulative from Mozambique, Tanzania, Uganda and Kenya, subsequently attracting Investment form World’s most powerful Oil & Gas Companies that Include Anadarko, ENI, BG, Shell, Petrobas, Total CNOOC , Panacontinental among others. According to SBG Securities a Member of the Standard Bank, 100 Billion Dollars in FDI is expected to be invested in East Africa’s Oil & Gas Sectors. This as Mozambique and Tanzania compete for the First LNG Production eyeing the Lucrative Asia Pacific Market whereas Kenya and Uganda Oil is being planned as an integrated project by a Tullow & Africa Old Led Consortia that Expects to Export the First Oil from the Region in 2018.
Kenya’s Geothermal Energy Development provides Investors with huge investment opportunities within the Electric Power sector. Kenya Already 9th Largest Geothermal producer in the world has 3,000 MW of proven reserves and 7,000 MW inferred. The Kenyan Government through the Geothermal Development Company (State Corporation) Undertakes the Initial Geothermal Exploration and Steam Filed development; this takes away the risks many investors do not want to take allowing them to participate in Power Plant Development in Private Public Partnerships. With Ready market for domestic consumption and Cross Border power Exports Consolidated by the Integration of the East Africa Power Pools. The Power Purchase Agreements are entered between Private Developers and state Distribution stake Corporate KPLC Prior to Project Development.
Africa reserves for renewable are the highest in the world. According to Word Energy Council, it is estimated that 18 out of 35 developing countries ranked the highest in renewable energy reserves are in Africa. Highest wind potential is mostly observed in the coastal area which tends to have both onshore and off- shore potential. Kenya hosts the Lake Turkana wind Power is the Largest Single wind power Project in Africa. Data Collected and Analyzed in 2007 indicate that the site has some of the best wind resources in Africa with Consistence wind speeds averaging 11 Meters/ second. And from the same direction around year.
The Lake Turkana Wind power Plant Development has been completed and Commissioned (2015). Currently operated through consortium of six European Conglomerates, Namely KP&P, BV Limited, Aldywich international, Vestas wind system, Norwegian Investment fund for Developing countries, Industrial Fund for Developing countries Denmark and Finnish fund for Industrial cooperation Limited. Lake Turkana Power Project is expected to generate 300 MW when is fully operational by End of 2016 and has a 20 Year Life span. The Project is projected to generate enough power to inject about 14% of Country Installed Capacity.
There will be Lucrative Opportunities for Consultants and Technology providers with Expertise in Nuclear Energy Development as Many Countries across the African Continent Embark on plans to Develop Nuclear Energy. While it may be Capital intensive and require high levels of Expertise to Develop, Nuclear Energy is Green sustainable and perhaps the cheapest to harness Energy from one the Initial Installations are in place. It Cost about $ 5 cents to produce a Kilowatt of Nuclear power compared to Thermal Energy which $ 27 Cents, more than five times the Cost!

Kenya plans to become a Nuclear Energy producer by 2022. The Nuclear Energy Program through a Consultant composing of a Team of Local and international expert is currently undertaking a Technical Evaluation study that wills also Evaluate Nuclear Technology compatibility to the Nation Grid.

Kenya Expects to have its First Nuclear –fired – electricity generation plant by around 2022. Previous Estimates the cost of setting up a 1,000 MW Nuclear power plant at $ 3.5 Billion Dollars.

Lake Kivu is one of the world’s three known Exploding Lakes presenting a threat of Violent Eruption with Disastrous effects on local lives, wildlife and local lives. However a Technological Innovation has found a way of transforming this Potential Geochemical risk to Electric Power. Current concentrations of dissolved CO2 in Lake Kivuwatt are estimated at 250 – 300 billion cubic meters, while methane concentration is nearing 55 – 60 billion cubic meters. Experts predict the Lake could become saturated with in the next 50 – 200 year. Scientist has found an innovative way of Methane Extraction. Deep below surface of the Lake, volcanic vents release large amounts of Carbon Dioxide which is then converted to methane by sub surface bacteria that is then tapped to a power plant system that taps the dissolved gas to generate electricity.

These Project Presents Great Investment opportunities for Independent Power producer as Private Investor as well as Massive Marketing opportunities for Service & Technology providers within Expertise in this type of Electric Power Development. As a Unique and Flexible Financing Structure, arranged by Emerging Africa Infrastructure Fund and the Netherland Development Finance Company raised a Total debt funding of $91.5 million dollars to phase 1 of Methane extraction and production facility and a 25 MW power Plant located on the shore of Lake Kivu.

With phase 1 funding complete. There is three more phases to do in finance rising in order to reach 1, 000 MW Planned Capacity. Participation is open for Private and Public Investors to participate in financing structure designed for this project that provides a useful precedent for Rwanda’s power Generation.

Statistics & Info-graphics For East Africa’s Energy Mix

Farm Out Structure for Rovuma Basin Area 1 & 4

Facts & Figures | Cost of Generating Power

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Kenya’s Emerging Oil & Gas Industry

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