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December 2016

28 December 2016

East Africa leads in clean energy uptake across Africa – report

By Njirani Muchra | The East African

East Africa’s economies top countries in sub-Saharan Africa in injecting clean energy into their national grids, through new projects in wind and solar.

The latest report of Climatescope, the clean energy country competitiveness index by Bloomberg New Energy Finance, shows that clean energy policies are becoming more widely adopted across sub-Saharan Africa.

“Fourteen countries from the region have introduced renewable energy targets that saw their clean energy investment nearly double between 2014 and 2015, to reach $5.2 billion,” the report says.

Kenya consolidated its standing as a global leader in geothermal energy, adding 58MW, which raised its total installed capacity to 740MW at the end of 2015.

Ethiopia commissioned 150MW of onshore wind power plant in 2015, nearly doubling its cumulative wind capacity since 2010. It is second to South Africa in terms of new installations.

In June, Ethiopia’s Minister of Water, Irrigation and Electricity Motuma Mekassa told the Africa Energy Forum in the UK that the country would be tendering for a 5,200MW solar power plant, which would be the biggest project on the continent.

“We have an average daily solar radiation potential of 5.5kWh and this project will be a game changer. We have held formal discussions and we will look out for the best partner,” said Mr Mekassa.

According to Bloomberg New Energy Finance, Ethiopia has this year issued requests for proposals to install a dozen additional geothermal and solar projects, introducing a competitive auction bidding process that is significant for the sector.

“Four of the new projects will be privately owned; the rest will be built under engineering, procurement and construction contracts and retained by the Ethiopian Electric Power,” the report says.

More investments

South Africa was the best scoring country in sub-Saharan Africa on clean energy investments, thanks to its auction programme which saw it bag $4.1 billion of new investments last year.

It was followed by Uganda and Kenya, thanks to significant policies supporting clean energy development, healthy investment activity and a growing number of stakeholders involved in the energy sector. Nigeria also signed a $1.75 billion deal with 14 solar companies to supply electricity to the nation’s power grid.

Last year also saw an increased interest from private equity and venture capital flows into off-grid solar. The report also shows that off-grid electrification companies in Kenya, Tanzania and Zimbabwe received about $80 million in new investments last year — more than four times the amount recorded in 2014.

Early this month, Kenya and the World Bank said that they were in talks to finance a $150 million solar-and-wind project. Kenya Power managing director Ben Chumo said that this was part of the government’s efforts to get new capacity from renewable sources, which should bring down energy costs.

“The construction of this new plant is expected to start mid next year and will seek to replace the more expensive diesel-fuel generation,” Mr Chumo said without divulging the expected power wattage of the plant.

According to data from African Development Bank, Kenya’s power is the most expensive in the region at $0.18 per kilowatt-hour, compared with $0.09 cents in Tanzania, $0.07 in Uganda and $0.03 cents in Ethiopia.

The $316 million financing of the 100MW Kipeto onshore wind farm in Kenya was another record-breaking deal for the country following the conclusion of the $859 million Lake Turkana wind project financing in 2014.

“By far the largest clean energy project currently under construction is the 310MW Lake Turkana wind farm, which is expected to come online in 2018. Several other wind projects are in early planning stages. There are also a handful of large solar projects. Once built, these projects will be among the largest PV plants in sub-Saharan Africa,” the report says.

Off-grid electrification

Ghana, Senegal and Uganda together attracted a combined estimated $160 million in investment for 110MW of solar PV projects. This marked a remarkable step up for the region, considering just 12MW of solar PV secured financing in 2014 and 56MW in 2013. This acceleration is set to continue in 2016, with 145MW of solar PV already tracked by Bloomberg New Energy Finance.

In the geothermal sector, Ethiopia’s $100 million financing of the first phase of Reykjavik geothermal Corbetti power plant boosted the investments last year, with deals exceeding $95 million recorded in four other countries including Kenya.

While the overall trend appears positive, some countries have not reviewed their targets. For instance, Tanzania only plans to install 100MW of solar, 200MW of geothermal and 200MW of onshore wind by 2025 against a complete power-generating matrix of 10.7GW.

“Most new installations in Tanzania will be gas and coal, as the government aims to cut reliance on the costly emergency diesel-fired power stations. These efforts are starting to bear fruit: by end of 2015, gas capacity topped large hydro for the first time,” the report says.

Source: https://asokoinsight.com/news/east-africa-leads-in-clean-energy-uptake-a...

28 December 2016

Nigeria eyes 30 per cent 2018 broadband penetration

By Mohamed Momoh | Africa Review

Nigeria will achieve the 30 per cent national broadband penetration by 2018 as projected in the National Broadband Plan, official said.

Communications minister Adebayo Shittu said on Monday in Abuja that the country had so far achieved between 18 and 20 per cent penetration as a result of private sector initiatives.

He said Nigeria would also look into the complaints of multiple taxation to lessen the burden on ICT operators.

Mr Shittu said the government was encouraging all technology companies to invest in the communication sector to expand the broadband penetration.

Tariff increase

On the proposed data tariff increase, Mr Shittu said the matter was almost sorted out.

He said the issue was between the Nigerian Communications Commission (NCC) and the companies.

“When it happened, a lot of people accused me of taking money from these companies, so I have to explain the role I played and you would recall that the Senate, because of the uproar that greeted the issue, called a stakeholders meeting.’’

The minister urged political leaders to see telecoms as a strategic national asset without which Nigeria could not make progress.

Private sector

“If you are a governor and you don’t have access to telecommunications in this world, how will you reach to the masses, how do you communicate?’’ he wondered.

His ministry, he said, would sustain its collaboration with the organised private sector to further explore “the unbelievable potential of ICT’’.

“I am also using this platform to call all operators within the ICT sector to come forward for an interaction with me to look at whatever needs to be done in order for us to improve.

“There are many employment opportunities to be explored if good attention will be placed in the direction of ICT,’’ he said.

Source: https://asokoinsight.com/news/nigeria-eyes-30-per-cent-2018-broadband-pe...


December 2016

08 December 2016

Finnish fund Taaleri to invest $100 million in East and Southern African property market

By James Ngunjiri | Business Daily, Kenya

Finnish private equity fund and financial services group Taaleri Plc plans to invest Sh10 billion ($100 million) in East and South African real estate projects.

Taaleri, in partnership with local private equity firm Cytonn Investments, has so far invested about Sh4 billion in the Kenyan real-estate market.

The two companies are exploring more investment opportunities in both real estate and renewable energy sectors.

“East Africa is the area where we have been active. There are tremendous opportunities in the region. We started with about $50 million with the first fund. We are going to raise new funds, double the first funds, by beginning of next year,” said Taaleri Plc chief executive Juhani Elomaa.

Mr Elomaa also announced the firm was considering venturing into regional green energy projects from early next year. The two firms have projects in Nairobi, Kiambu and Meru counties.

They invested Sh1 billion in Amara Ridge, a high-end residential development in Karen, Nairobi. It sits on five acres and consists of 10 five-bedroom houses, each of which had a sale price of Sh95 million.

Cytonn has also ventured into other areas including the fast-growing middle income town of Ruaka on the outskirts of Nairobi where it is building 400 units in a gated community at Sh2.5 billion.

The project is scheduled for completion within three years and targets middle- to lower-income earners looking for modern apartments.

In Meru town, it has partnered with Fusion Capital in the ongoing mixed-use development of Greenwood City mall, which by August was 35 per cent complete.

Cytonn Investments is offering the one, two and three bedroom apartment options set on the 4.18-acre parcel of land in what it terms as a “lifestyle community”.

Taaleri’s head of Africa Antti-Jussi Ahveninen said the Kenyan market is being driven by healthy fundamentals.

“In Kenya you will not run out of ordinary families who will need a good quality home, we are here to provide those homes,” said Mr Ahveninen.

He termed the Kenyan market as having a lot of width, depth and very dynamic. He believes the Real Estate Investment Trust (Reits) regulations serve the market well and are well structured by the regulator, Capital Markets Authority.

“This allows investors like us to come into the market and fund development projects because how we see it is that even when our money leaves and we exit the ownership of the property, it will stay here and the proprietor of the new property will create jobs for Kenyans,” said Mr Ahveninen.

Source: https://asokoinsight.com/news/finnish-fund-taaleri-to-invest-100-million...

08 December 2016

AfDB approves $600 million loan for Nigeria

By Staff | This Day, Nigeria

In another boost to the Nigerian economy, the board of the African Development Bank (AfDB) has approved the sum of $600 million to support the Nigerian economy.

This was revealed by the President of AfDB, Dr. Akinwumi Adesina, monday while fielding questions from journalists at the 11th African Economic Conference in Abuja.

Adesina said: “As far as the AfDB is concerned, we had said that we are going to consider a billion dollars to support Nigeria when I visited the president and already that has gone to the board and $600 million has been approved by our board just a month ago for Nigeria to support its economic governance.

“The $600 million is going to help in many ways to stabilise the naira. It is also going to help the government to support the very much needed reforms in the agricultural sector in terms of different agricultural policy reforms and also in the energy sector that is very fundamental to how you grow the economy and come out of recession.”

On how Nigeria will emerge from its current recession, he said the AfDB would provide support to the private sector, adding that the “Bank continues to make significant amounts of support in the private sector, they are investing in banks, we are giving them quite a lot of financial support trying to keep them afloat in this very tough period”.

He added that Nigeria had taken some tough policy decisions, stating: “I think the government has taken some tough policy decisions with the removal of subsidy on petrol and the naira was also allowed to devalue.”

He observed, however, that there was still a problem with regard to the foreign exchange market.

“There are still a number of issues to be sorted out. We have got to have the monetary policy and the fiscal policy regime sorted out so as to be able to stabilise the naira and provide sufficient amount of access to foreign exchange for those that want to bring in machinery equipment or materials,” he said.

Adesina was optimistic, nonetheless that as these policy instruments are sorted out, Nigeria would be in a good position to significantly attract some amount of foreign direct investment, which it needs.

Source: https://asokoinsight.com/news/afdb-approves-600-million-loan-nigeria

08 December 2016

Addis light rail serves 45 million passengers in first year (Ethiopia)

By Modestus Anyesore | Capital Ethiopia

Over 45 million people have taken a ride on the Addis Ababa Light Rail Transit (AA-LRT), over the past 14 months.

The trains began running on September 20, 2015, so people who run the system are assessing the first year of progress.

Awoke Mulu, Public Relations Head of AA-LRT, told Capital that the transport system has been improving over the past year.

Awoke said initially the AA-LRT were using containers in some ticket stations and most of the ticketing centers were not connected with electric power, which made the operation more difficult in the evening.

“Now most of the operation has become more efficient. 12 ticket centers are connected with electric system and other four centers will be electrified soon,” he added. The total ticket centers are 39.

“As a beginner we have accomplished the year with success but we have to improve some of our operations,” Awoke said.

Daily revenue has reached 400,000 birr. He said that the main target of AA-LRT, which is under the Ethiopian Railway Corporation (ERC), is not revenue but alleviating the transportation shortage in Addis Ababa.

Tickets currently cost two, four and six birr depending on the distance of the trip. Even though the fee is small hopes are that the system will eventually become profitable. “Ticket prices are based on a detailed study and we expect fares to remain in place for a while,” he said. One of the issues the system faces is that some board the train without purchasing a ticket. The corporation will soon add 40 ticket controllers and more will be hired in the future. Another problem that occurs is when trucks or automobiles run over the tracks and force the trains to stop.

Awoke said that trains do require maintenance but they have enough spare parts and they rarely suffer heavy damage. There are a total of 41 trains and up to 26 trains provide service every day.

He said that on average a train reaches a station every 15 to 20 minutes. “Based on the public awareness the speed of the trains will be improved from the current 30km/hour and the arrival of trains to their terminal will be reduced to 6 minutes as per the initial schedule,” he explained.

“Safety is a priority for us so the speed will be improved gradually,” he added.

The AA-LRT, which has received international attention has consumed close to half a billion USD. It was constructed by the Chinese state owned CREC, which manages the operation with Shenzhen Metro Group.

The management contract will be finalized within two years and an Ethiopia crew will completely take over the operation. From the total cost of the project 85 percent is covered by a loan from the Chinese government, which also supported the first cross country heavy electric railway line that connected Ethiopia with Djibouti.

Source: https://asokoinsight.com/news/light-rail-serves-45-million-passengers-in...

08 December 2016

$9 billion cement investment on the cards for Tanzania

By Staff | The Citizen, Tanzania

Three companies plan to invest up to Sh20 trillion in cement production in the country in the next few years.

Demand for cement looks set to rocket with the implementation of several multibillion-dollar infrastructure projects.

The news comes amid fears that problems besieging the recently commissioned Dangote cement factory in Mtwara could scare off potential investors.

The envisaged investment in cement production could double Tanzania’s installed capacity, Bloomberg news agency quoted Industry, Trade and Investment minister Charles Mwijage saying.

Infrastructure projects lined up for implementation include the $10 billion Bagamoyo port development, $7 billion standard gauge railway construction and the laying of a $4 billion oil pipeline from neighbouring Uganda to Tanga Port. All these projects will require huge quantities of cement.

“There are big projects which are attracting people to put up cement industries here,” Mr Mwijage told Bloomberg.

He declined to identify the potential investors or reveal details of their plans, only saying that they were at different stages of implementing their programmes.

Until 2011, Tanzania was home to three major cement manufacturers, namely Tanzania Portland Cement (Twiga), Tanga Cement (Simba) and Mbeya Cement (Tembo).

The number has since risen to eight after Athi River Mining (Rhino), Dangote Cement, Camel Cement, Lake Cement (Nyati) and Lee Building Materials set up shop in the country, taking the total installed capacity to 10.3 million tonnes.

Annual production is about 7.1 million tonnes, while local consumption is 4.1 million tonnes, according to Mr Mwijage. The surplus is exported to neighbouring countries, including the Democratic Republic of Congo and Burundi.

London-based Exotix Partners said in an October research note that demand for cement is expected to grow by as much as eight per cent annually “in the medium-term” .

Lake Cement last month announced plans to almost quadruple its capacity to 1.9 million tonnes by building a new plant in Bagamoyo at the cost of $150 million.

Last year, Dangote Cement commissioned in Mtwara a factory capable of producing 3 million tonnes annually, and production began in February.

Production was suspended last month due to some technical issues that have now been fixed, spokesman Carl Franklin told Bloomberg by email.

Dangote chief executive in Tanzania Harpreet Duggal was recently quoted saying running costs in Tanzania were much higher than in other countries where Dangote had similar operations.

One of the main reasons was dependence on diesel generators for powering the plant.

The factory is also far from the main cement market, raising the cost of transportation.

Cement manufacturers have in recent years been complaining about the quality of locally produced coal.

The government earlier this year banned the importation of coal, saying Tanzania had enough good quality coal. The decision was fiercely criticised by cement manufacturers.

However, a recent government-commissioned report concurred with claims by manufacturers that the quality of coal mined in the country was questionable.

The report lists major challenges cement manufacturers have been grappling with in recent years, including poor and/or fluctuating quality of coal, damage to kilns and a decrease in overall productivity.

When Dangote began production in Tanzania in February, it undercut competitors such as Twiga and Simba by selling a tonne of cement at $80 compared to a national average of between $90 and $100, according to Exotix.

“We expect aggressive cost management strategies from all players to protect the bottom line,” Exotix said in its note.

Even as more cement investment is in the offing, the issue of energy for running kilns is still unresolved.

Cement makers are concerned that the coal they buy locally from Tancoal is of low quality and does not meet demand.

Source: https://asokoinsight.com/news/9-billion-cement-investment-on-the-cards-g...


December 2016

07 December 2016

$64 million CIMAF cement plant opens in Tema (Ghana)

By Everlyn Aturi | Business & Financial Times, Ghana

A €60million new cement production, CIMAF, has begun operations after it was opened by President John Dramani Mahama in the free zone enclave, Tema.

As the first Moroccan investment in Ghana, with a fix production capacity of 1million tons annually, the company is also building an auxiliary paper factory to produce cement paper bag for cement packaging, create over 200 jobs at the operational stage, and additional 5000 indirect jobs in cement distribution and transport haulage.

Minister of Employment and Labour Relation, Haruna Iddrisu, who spoke on behalf of President John Dramani Mahama said the initiative will contribute immensely to the construction sector, and employment generation and the growth of the economy of 1million tons of cement production.

“Ghana remains a safe and secure place of investment and the reality of the commissioning remains a manifestation of the confidence of investors in Ghana’s economic leadership.”

Mr. Iddrisu said over 1000 jobs were created at the construction stage and at the operational stage 200 additional jobs were also created whiles noting that government will accept trade competition, but not unfair trade practices.

“In earnest it is the expectation of the President of Ghana to make sure the International Trade Commission will begin work in earnest to ensure fair and equitable trade and where necessary sanction heavily those who will hide behind export subsidizing to undermine local cement production and the local cement industry as a whole,” he noted.

He stated that apart from this direct foreign investment by Cimaf, government is looking forward to working with them to support Ghana’s housing sector.

President of Cimaf, Anas Sefrioui said that an investment of this nature will enable Ghana attain sufficiency in cement production.

He indicated that 95percent of the company will be entirely managed by Ghanaian human resources. “For this reason the company has sent 30 Ghanaian technicians to Morocco for a three month training program to ensure the continuity of the project in the years to come.”

The plant consists of state-of-the-art equipment such as cement grinding, laboratory, packaging unit and others. Cimaf has operational plants in some part of Africa including Angola, Tanzania, and Senegal, with other plants undergoing construction in Mauritania and Chad.

Source: https://asokoinsight.com/news/64-million-cimaf-cement-plant-opens-in-tem...

07 December 2016

Fusion Capital $40 million Rwanda property opens for business (Kenya)

By Brian Ngugi | Business Daily, Kenya

Kenyan private equity firm Fusion Capital has completed its mixed-use development project in Rwanda at a cost of Sh4 billion.

The 30,000 square-metres structure known as Kigali Heights was officially opened for business by Rwanda president Paul Kagame on Monday.

“This project is following through on what the struggle was about, a developed and prosperous Rwanda,” said Mr Kagame.

The development consists of a nine-storey block along the boulevard frontage and a six-storey block that faces the Kimihurura Roundabout in Gasabo district opposite Kigali Convention Centre.

It has attracted both international and local players in banking sector and retail industry such as supermarkets chains, restaurant chains, clothing stores, and food chains.

Full occupancy is expected by the end of quarter one 2017 according to the PE fund.

Some of the brands that have taken space include Java House, Deacons, Bosini, Ecobank, Zuchinni, Bold in Africa and Simba supermarket.

Fusion Capital raised bulk of funds from its international individuals and institutional clients. It has 13 projects across the East Africa, the major ones being in Kenya (Upper Hill, Nakuru and Mombasa), Uganda and Rwanda.

Fusion Capital Real estate executive director Daniel Kamau said the firm was attracted to Rwanda based on the country’s rapid growth in Africa.

The PE fund is in partnership with business people Dennis Karera and Michael Idusso.

Source: https://asokoinsight.com/news/fusion-capital-40-million-rwanda-property-...

07 December 2016

South Africa economy sinks further in third quarter

By Staff | The Citizen, Tanzania

South Africa’s economic growth slowed in the third quarter to 0.2 per cent, figures showed yesterday, highlighting the risk of a damaging credit rating downgrade next year.

The country was granted a reprieve in recent weeks when rating agencies did not drop it into “junk” investment category, but they warned of the impact of poor growth.

“The agriculture industry posted its seventh consecutive quarter of economic decline, on the back of one of the worst droughts in recent history,” Statistics South Africa said in a statement.

It added that manufacturing and trade had also contracted, contributing to the reduced 0.2 per cent annualised growth rate, which was slightly below expectations.

Standard & Poor’s rating agency on Friday maintained South Africa’s foreign currency debt status one notch above junk status, and kept its negative outlook.

Rumbling political frictions erupted again last week when President Jacob Zuma beat back an attempt by at least four ministers to oust him from power.

The rebellion was the most serious threat to the president since he took office in 2009.

Zuma has been engulfed by graft scandals, while South Africa’s economic growth has fallen and unemployment hit a 13-year high.

Efforts to avoid junk status have been at the centre of wrangling for months, with Zuma at loggerheads with Finance minister Pravin Gordhan, a reformist widely respected among international investors.

Growth in the second quarter was revised upwards to 3.5 per cent.

Source: https://asokoinsight.com/news/south-africa-economy-sinks-further-in-thir...

07 December 2016

RBZ to release $7 million bond notes this week (Zimbabwe)

By Staff Writer | The Source Zimbabwe

Zimbabwe’s central bank says it will release $7 million worth of $2 dollar bond notes into circulation this week.

The notes, which are meant to ease a banknote shortage in the southern African nation, trade at par with the US dollar.

Last week the Reserve Bank of Zimbabwe (RBZ) released the first batch of the bond notes worth $10 million into circulation after months of speculation but long queues have remained a fixture at banks around the country.

The central bank said it will release a total of $75 million worth of bond notes by the end of this year, out of a total of $200 million under an Afreximbank facility.

“In line with the strategy to release the Bond Notes on a measured or drip feed basis, the Bank would like to advise the public that it is releasing the second batch of $2 Bond Notes amounting to $7 million this week,”the RBZ said in a statement on Wednesday.

“This brings the total amount of Bond Notes disbursed to $17 million against a value of $70 million payable to exporters of goods and services under the Export Incentive Scheme.”

The Bank added that it would release the $5 denominations into the market in ‘due course.’

The bond notes have gained acceptance despite being criticized by a sceptical public who viewed their introduction as a scheme to return the much loathed Zimbabwean dollar which was abandoned in 2009 after hyperinflation had rendered it worthless.

Source: https://asokoinsight.com/news/rbz-to-release-7-million-bond-notes-this-w...