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Tuesday, 15 April 2014

Glencore beats off rival bid to snap up Chad energy explorer

JOHANNESBURG ( – London-, Hong Kong- and Johannesburg-listed diversified mining and marketing company GlencoreXstrata has beaten off a rival bid to snap up oil-and-gas exploration company Caracal Energy, which is active in the landlocked Republic of Chad in Central Africa.

Glencore’s all-cash offer has been accepted by Caracal Energy, whose CE Gary Guidry said his company had accepted the £5.50-a-share cash offer of $1.4-billion because it was superior to the proposed merger with TransGlobe.

"We’re extremely disappointed," said Ross Clarkson, CE of TransGlobe, which will receive a $9.25-million termination fee from Caracal.

Glencore, which has had a partnership with Caracal in Chad for the last two years, is also active in oil and gas offshore of Equatorial Guinea and in Cameroon.

The arrangement with Caracal allows Glencore to take operatorship of Caracal’s oil development activities in Chad, where Caracal has three production-sharing contracts with the government, which allow it to explore and develop over 26 103 km2 in the south of the 10.8-million-population developing country, bordered by Libya in the north, Sudan in the east, Central African Republic in the south, Cameroon and Nigeria on the south-west, and Niger in the west.

“We believe the combined business will be even better placed to take advantage of the long-term opportunities across the African oil sector,” said Glencore head of oil Alex Beard.
Chad is a candidate country of the Extractive Industries Transparency Initiative, which has a global standard for transparency in the oil, gas and mining sector.

A Caracal shareholders meeting is due to take place in early June, after which closure of the transaction is likely to take place with Glencore, which employs 190 000 people in 90 offices in 50 countries and has diversified operations on 150 mining and metallurgical sites, offshore oil production assets, farms and agricultural facilities.

Glencore's energy footprint also embraces coal, where it is active as South Africa's largest coal exporter and 31.7% shareholder in the Richards Bay Coal Terminal, which has a capacity to export 91-million tons of coal a year.

Edited by: Creamer Media Reporter

Friday, 11 April 2014

Kenya Plans Sovereign Wealth Fund for Potential Oil Money

Kenya’s planned sovereign wealth fund will be set up before the expected flow of oil money from Tullow Oil Plc and Africa Oil Corp.

Acting Central Bank of Kenya chairman Mbui Wagacha said the framework for the sovereign wealth fund had been completed and that it was being fine-tuned at the Attorney-General’s office.

The fund is meant to shield the economy from cyclical changes in commodity prices, build savings for future generations and support investment in infrastructure.

“We are unique in Kenya in that we are setting up our sovereign wealth fund prior to the phase of exploitation of natural resources. This fund will come handy in times of difficulties or volatility. What it will need are skills in fund management, investment and operations,” said Dr Wagacha, also an economic adviser to the President.

Tullow and its partner Africa Oil, which found Kenya’s first crude oil in 2012, are working with the government on a plan to start field development and export pipeline construction as early as next year.

The two firms expect to start pumping by 2016. Kenya is also seeking to develop its mining potential to derive more income from an industry that represents less than one per cent of the gross domestic product, according to government data.

The country is a major producer of soda ash and has deposits of minerals, including coal, gold and gemstones.

The mining ministry has a target to grow the share of the industry to three per cent in the short term.

Thursday, 10 April 2014

New Cookstove Designs offer Improved Performance

Through the Spark Fund Project in Kenya, GVEP has been working with local stove entrepreneurs to develop new biomass (wood & charcoal) cookstove designs for domestic use. The new stove designs will offer greater efficiency, reduced emissions, and improved safety and durability compared to other local existing models. 

The involvement of local stove manufacturers and end-users in the process is a crucial ingredient for ensuring success of the product. GVEP has worked closely with Kenya Stove Works Limited, a local stove design and manufacturing company, who provided technical expertise.

In February 2014, GVEP brought together 12 entrepreneurs from Kisumu and Central regions in Kenya and trained them on production of the new stoves. The entrepreneurs will produce the initial batch of stoves that will be used to conduct field-based testing to establish the level of fuel savings as well as gaining further feedback from end users. 

“Engaging local manufacturers and users coupled with application of best design principles has resulted in a product of good performance, which is suited to local needs and tastes,” explains James Gatimu, a technology mentor at GVEP who has been working on the program.
Initial testing, conducted at the University of Nairobi indicates that the stoves can offer improvements in efficiency compared to local models in the market. 

The stoves have been fabricated with metal gauges prescribed by Kenya Bureau of Standards with the aim of making them more durable. Metallic parts likely to wear out fast, by nature of their position in the stove body – for example those in direct contact with burning flames- have been made detachable for ease of replacement. Typically these products are designed for lower-income households that are price sensitive. There are numerous and varying user requirements, due to culture and geography.

“The combustion of biomass occurs in a high- temperature, extremely corrosive environment. Optimizing price, usability, durability, and efficiency is a daunting task”, Said Payan ole-MoiYoi of Kenya Stove Works Limited. 

Ole-MoiYoi adds, “I hope these stoves serve as the starting point for an on-going collaborative design process moving forward, between stakeholders in this sector, the private sector, and end users, so that eventually these products are optimized to the highest degree possible for the different geographical and cultural settings in which they are used.”
Other design features include the fuel chamber of the wood stove being designed to accommodate a considerable amount of fuel thus eliminating the need for constant tending and a thick layer of insulation to reduce the outer surface temperature making the stove safe to use at all times. 

However, as a result of using better quality and more durable materials the stoves will be more expensive than other locally made stoves. But they are expected to bridge the gap that currently exists in the market between basic improved cookstoves produced and other advanced models. They will offer local producers an opportunity to add new products to their range that will be more profitable and offer greater benefits for the end user.

GVEP is currently developing a marketing strategy for the new cookstoves that will consider the best way of communicating its benefits so that end users can realize the added value from the increased up front cost.

“I am delighted that my artisans have been trained. I look forward to starting manufacturing and trading in the new stoves. I am sure my clients will like them thus increasing my sales volume and hence growth for my business” says Josephat Kariuki, an ICS producer from Central Kenya and one of the beneficiaries of the training on the new stove designs.
According to World Health Organization (WHO), 84% of Kenyan households primarily rely on biomass fuels, which emit toxic fumes. Exposure to these harmful emissions, WHO observes, is the largest risk mortality factor in Kenya, being responsible for over 25% of pneumonia deaths and 40% of other respiratory illnesses.

The Spark Fund Project is part of an initiative of the Global Alliance for Clean Cookstoves, as part of their strategy to create an enabling environment that enhances demand and strengthens supply in cook stoves and fuels sector.

The initiative has been working with cook stoves stakeholders to improve the performance and quality of locally manufactured, efficient biomass cook stoves in Kenya.

Posted by Deborah Mupusi

Innovative Biogas Business Model Gives Affordable Energy to Low Income Farmers in Central Kenya

The scarcity of wood fuel and high cost of kerosene may no longer be a concern for many rural households in Central Kenya, thanks to a patent pending pay-as-you-go biogas business model that delivers a user friendly and affordable energy alternative to cooking and heating.
Schutter Energy, a client of the Kenya Climate Innovative Center(KCIC) has developed the Takamoto Biogas system for domestic use. The technology is designed with mobile, money-integrated meters, which allow customers to pre-purchase energy units, just as it is for Kenya Power Prepaid customers.

The technology provides an affordable alternative, compared to traditional biogas systems. Farmers pay a small fee to install the system; they then pay for the biogas as they use it. This saves the farmers upfront cost (an average of $1,700) for purchasing the biogas system.
The company retains ownership of each biogas system that is installed, taking full responsibility for its maintenance, as part of the customer service Schutter Energy offers.
Over the years, most Kenyans have been relying on firewood, charcoal, and kerosene for fuel in their homesteads. However, these are becoming expensive amidst concerns that felling of trees is alarmingly on the rise. Emissions from biomass and kerosene also pose serious health risks.
To generate biogas, livestock farmers load into biogas digesters a mixture of cow waste and water. The system also produces a bio fertiliser, which has the potential to increase farmers’ yields. During installation, the farmers are trained on how to operate the digester for optimum results.
Schutter Energy has been working closely with GVEP through the KCIC, since its inception, to secure financial support and promote their business model.
“They are one of many other young, innovative enterprises that the KCIC supports through a mix of business and technical advice, access to facilities and startup grants,” explained Neeketa Khimasia, SME Advisor, and KCIC Programme Manager.
Kyle Schutter, the founder of the Schutter Energy reveals that this year they plan to deliver PAYG biogas to more than 400 families. The company plans to extend its operations to Rift Valley, and will scale up to 10,000 biogas digesters, across East Africa within the next 5 years.
Modern energy access, he points out, has been the foundation of success in the Western world and he hopes the same will happen in Kenya.
The KCIC is a Consortium funded by the British and Danish governments, in partnership with the World Bank’s infoDev programme. GVEP is one of four equal members of the Consortium (along with Strathmore University, PricewaterhouseCoopers and Kenya Industrial Research and Development Institute) charged with setting up and managing the Centre for its first four years. The Centre provides incubation, capacity building and financing to entrepreneurs and small and medium enterprises, keen to develop innovative solutions in agribusiness, renewable energy and water, to tackle climate change. It was formally launched in September 2012 and currently has around 75 clients.
Posted by Alessandra