Finance and Policy

ESI Africa is a provider of daily electricity news. Our coverage includes Africa investment news as well as energy regulation and energy funds.

Eskom wins recognition for integrated reporting

[img:AwardT_0.jpg| ]26 June 2013 - Eskom was the overall winner of the 2013 Nkonki state-owned companies (SOC) integrated reporting awards. This is the second year in succession that Eskom has received this accolade.

Eskom also scooped several other awards at the Nkonki SOC integrated reporting awards in the following categories; ethical leadership and corporate citizenship; boards and directors; compliance with laws, codes, rules and standards; internal audit; the governance of risk; integrated reporting and disclosure; and the framework for integrated reporting.

International accolade for KenGen MD


By Antonio Ruffini

24 June 2013 - Outgoing managing director (MD) of Kenya Electricity Generating Company (KenGen), Edward Njoroge, has received a lifetime achievement award for his impact on the electricity utility sector in Kenya.

The award was presented to Njoroge at a ceremony during the Africa Energy Forum (AEF) convention that is took place between the 18th and 20th of June 2013. This recognition coincides with Njoroge stepping down as MD of KenGen at the end of June 2013, having filled that role for a decade.

Njoroge played a major role in the evolution of Kenya’s electricity sector, which has undergone restructuring and privatisation over the recent years. A pivotal moment for the country’s electricity sector was the floating of the formerly fully state-owned generation company, KenGen, on Kenya’s stock exchange. This took place in May 2006.

Njoroge describes the listing of KenGen as one of the highlights of his career. “The public listing achieved its objectives, one of which was to have a wide public ownership of the utility.” KenGen has some 275,000 shareholders, mostly small private investors, the largest single holder accounting for 2% of the 30% publically held portion of the company. The government of Kenya retains a 70% holding in KenGen. “As a publically listed company KenGen is pushed to deliver because the shareholders have high expectations,” Njoroge says. The company’s first annual general meeting after its listing drew 20,000 shareholders and was held at a national stadium in Kenya.

“When I took over as MD at KenGen it was a typical parastatal, very operational in its thinking.” Njoroge was able to change the mind-set at the utility, to enable it to think more strategically, and turned it into a more performance driven result oriented and focused organisation. As a result it was able to execute and deliver a thermal power project in 14 months, something that had taken seven years previously.

On a broader level, Njoroge has helped drive the unbundling of Kenya’s power sector. “Many countries wrestle with whether electricity sector unbundling is desirable. From my perspective, unbundling in Kenya was a good decision,” Njoroge says. “It enables companies to focus on their key mandates. If you have a company that does nothing but transmission, it helps it focus more on what needs to be done in that subsector. Similarly for the other subsectors.” To that end Kenya set up the Geothermal Development Company which is helping drive progress in geothermal energy in the country. Similarly, Kenya has a separate Rural Electrification Authority, which is funded by government. The country has set up an independent energy regulatory commission whose members have security of tenure. “On a regulatory front, Kenya has done well,” Njoroge says.

Njoroge believes one of the major breakthroughs for the country was when the government realised it had to put its own money into the electricity sector. “This was a major shift in thinking, as Kenya was too dependent on the development finance institutions (DFI). When I joined KenGen this was the case. With a dependence on the DFIs comes long approval process timeframes even for pre-feasibility studies.”

While Njoroge is retiring from KenGen, he will remain involved in the energy sector, probably outside Kenya but focused on Africa. “I am challenged by the huge gap between supply and demand for power not only in Kenya, but in Africa and want to play a role in closing this gap.”

Niger to begin construction on 100 MW power station

[img:NigerF.thumbnail.jpg| ]21 June 2013 - The landlocked country of Niger is expected to begin construction of a 100 MW diesel powered thermal power station by early July 2013, with a 200 MW coal-fired plant to be added by the end of 2013, according to the country’s energy ministry.

The 100 MW diesel thermal project, located at Goroubanda, and being financed by the West African Development Bank, the Islamic Development Bank and the government of Niger will cost some US$165 million and take 20 months to complete.

Libya & Tunisia consider gas pipeline

[img:Gazprom%20-%20Pic%201_0.jpg| ]20 June 2013 - Libya and Tunisia are considering plans to build a gas pipeline from the gas complex at Mellitah, west of Zawiya which is in north-western Libya, to the Tunisian city of Gabes. There is already a pipeline from Mellitah to Italy.

In 2012 Libya agreed to provide Tunisia with crude oil as well as oil products. The two countries are also looking at an electricity sharing project.

Djibouti furthers geothermal prospects

[img:Uganda%20-%20s_0.jpg| ]19 June 2013 - The World Bank has contributed US$6 million for Djibouti to further its geothermal potential. The funds will support Djibouti in assessing the commercial viability of the geothermal resource in the Fiale Caldera area within the Lake Assal region.

"Djibouti is located in the active East African Rift tectonic region which has a high potential for geothermal, an inexpensive, clean, reliable and renewable way of producing electricity," Ilhem Salamon, World Bank project team leader, says. "Unlike wind or solar which are intermittent sources of energy, geothermal energy can be available at any moment. Developing this rich resource could allow Djibouti to function almost entirely on clean and affordable energy and foster private sector participation in the sector."

Accolade for Eskom’s 2012 year end results presentation

[img:Eskom_0.jpg| ]18 June 2013 - Eskom’s 2012 year-end presentation has been given an accolade by the Investment Analysts Society (IAS), which voted it as the “Best Presentation to the Society (market cap above R30bn)”. The award is based on more than 250 company presentations that were made to IAS members in the 2012/2013 reporting cycle.  

Aman Jeawon, the utility’s group financial controller says, “Eskom is a significant player in every aspect of the South African economy. We have a responsibility to share information in a transparent and meaningful way with all our stakeholders.” Eskom’s presentations have sought to provide analysts, investors and all stakeholders with a complete and honest account of Eskom’s challenges and plans, he says.

Labour agreement for Medupi and Kusile

[img:Handsh3_0.jpg| ]18 June 2013 - An agreement has been entered into between Eskom, employers and labour at the Medupi and Kusile project sites. The goal of this agreement is to stabilise labour relations on site and expedite delivery of the two new coal fired power stations totalling some 9.6 GW. This new agreement comes into effect after an extensive negotiation process over the past few weeks.

Nigeria starts 700 MW hydroelectric project

[img:hydro%20dam_0.jpeg| ]18 June 2013 - Nigeria’s president, Goodluck Jonathan has launched the estimated US$1 billion Zungeru hydroelectric project in the country’s Niger state. He says the Zungeru hydroelectric scheme was initially conceived in 1982, but due to funding constraints work on the project never began. However, he says that his administration had now solved the financial challenge by making funds available to build the dam on the River Kaduna.

Swaziland electricity price increase too low

[img:Swaziland.thumbnail.jpg| ]14 June 2013 - The Swaziland Electricity Company (SEC) requested a 36.5% tariff increase for 2013, but the Swaziland Energy Regulator (SERA) awarded it only 9.3%. Subsequently the matter want to the country’s cabinet which reduced this tariff increase further to 5%, reports the Time of Swaziland.

Localisation drive in SA − Cape Town solar inverter factory

[img:Loan%20s_0.jpg| ]13 June 2013 - The South African department of energy’s Renewable Energy Independent Power Producer (REIPPP) programme has a strong localisation element. By the date of the third REIPPP bid, submissions for solar electricity tenders in South Africa requires that 65% of the total costs attributed to such projects be local. This excludes finance charges and land mobilisation fees of the operations contractor and imported goods and services.

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