IFC, Aldwych International, and Six Telecoms to Develop 100 MW Wind Farm in Tanzania

IFC, a member of the World Bank Group, is partnering with Aldwych and Six Telecoms to develop a 100 MW wind farm in Singida, Tanzania, enhancing power supply reliability, decreasing the need for costly fuel imports, and helping fight climate change. 

Being developed by project company Wind East Africa, the Singida project seeks to be the country’s first successfull, independent wind energy power project. This project is a result of the government of Tanzania’s push for diverse energy sources, as drafted in its recent policy on renewable energy. 

The total project cost for the wind farm is estimated at US$285 million, of which IFC, Aldwych and Six Telecoms will each contribute $18 million during the development stage and $71 million in total equity.

Located 700 kilometres from Dar es Salaam, the Singida wind farm will produce power through wind turbines to help diversify Tanzania’s electricity away from hydropower. When the hydropower supply drops during times of drought, Tanzania has had to turn to costly emergency power. Wind energy is an innovative way to boost power supply, with Singida expected to add 100 MW of capacity.

Singida will also provide power at more stable cost, as tariffs for wind energy remain relatively constant as no fuel source is required. The farm will be owned by Wind East Africa and operated by a management company led by Aldwych and Six Telecoms.

 "IFC invested in Wind East Africa’s Singida farm to support a pioneering energy project that can serve as an example to the entire region," said Oumar Seydi, IFC Director for East and Southern Africa. "With growing demand for electricity in Africa’s economies, independent power projects like Singida can add much-needed capacity to the power grid. Aldwych International and Six Telecoms’ participation demonstrates how the private sector can advance government efforts to increase energy security."

Mark Gammons, Project Director for Aldwych, said, "Having been involved in the successful development of the Songas gas to electricity project, Aldwych’s senior management team has deep experience in and a strong belief in the Tanzanian market. We believe this ground-breaking project will help develop the Tanzanian power sector and also the local economy around Singida."

Rashid Shamte, Founder and Head of Group Strategy at Six Telecoms, said, "As a Tanzanian company in telecoms, we were faced with the challenge of deciding how to best diversify our portfolio.

The crippling power rationing in our country presented Six Telecoms with a great challenge in our operations, so this project was a compelling option. Six Telecoms applauds the leadership of TANESCO and the government of Tanzania for initiating the wind measurement campaign in selected areas of the country, for making the wind data available to all interested parties, and for welcoming private sector participation in the energy sector.

We are lucky to have experienced partners such as Aldwych and IFC leading our efforts in this project."

In addition to the investment, IFC will assist in the overall project development. IFC will lend its experience and expertise to project structuring process and to ensure that the project meets the appropriate environmental and social standards.

IFC is making this investment through its InfraVentures division, which was created in 2008 to support innovative infrastructure projects. IFC InfraVentures addresses constraints to private investment in infrastructure, including the limited availability of funds and experienced professionals.

Increasing access to power is at the heart of IFC’s strategy for sub-Saharan Africa. IFC invested $1 billion in infrastructure projects in Africa in fiscal year 2012, up from $200 million five years ago. 　

The president of the United Republic of Tanzania Dr Jakaya Mrisho Kikwete congratulates the Wind East Africa team on the progress made with the Singida 100MW Wind Project after receiving an update on November 4th 2011 at the Singida State House. Left to Right. Said Abdallah (Project Director), Simon Magesa [Project Coordinator-Singida] Rashid Shamte (Founder -Project Director), Mark Gammons (Project Director), Jayce Kaiser (Project coordinator) (Photo:/ State House)

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org. About Aldwych International

About Aldwych

Aldwych is a leading developer of power projects in sub-Saharan Africa. Its founders and management between them have a long history of international power industry experience. They also have extensive operational experience, including operations in sub-Saharan Africa.

Most recently, Aldwych, together with Danish partners, financed, built and brought into commercial operation the 90MW Rabai power plant near Mombasa, Kenya, and Aldwych is now co-developing the 300MW Lake Turkana Wind Project in Northern Kenya. 

Aldwych International Ltd is a wholly owned subsidiary of Aldwych Holdings Ltd ("AHL"), and AHL’s shareholders include its majority shareholder, the Pan African Infrastructure Development Fund, based in South Africa, and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. ("FMO", the Netherlands Development Finance Company). For more information, visithttp://www.aldwych-international.com/

About Six Telecoms Company

Six Telecoms is an international wholesale telecommunications carrier and Value Added Services

(VAS) provider to Mobile Network Operators (MNO) & Internet Service Providers (ISP) across Tanzania, East Africa and globally.

Founded in 2004 with a focus on international voice, Six Telecoms has successfully diversified into wholesale data, mobile value added services and media services.

Six Telecoms is a wholly Tanzanian owned company. For more information, visithttp://www.6telecoms.co.tz/

This could be East Africa's first large wind power project if delays in Kenya's wind power projects planned years ago continue ensure.

New Direction in Kenya’s Oil & Gas Policy & Regulations

As we end 2012 and usher in the year 2013, i wish all my readers happy holidays and a prosperous new year. Please continue reading as i promise more and better content in the new year.

In this article i articulate Kenya's Ministry of Energy policy direction in oil and gas exploration and production going forward.

Oil Block size reduction

In order to ensure that oil companies are not allowed to withhold parts of blocks over which no work activities are committed, The Ministry of Energy has put in place a block size reduction policy. This is intended to make more exploration acreage available and therefore to provide more opportunities to different oil companies to apply for exploration acreages with a view to accelerating surface data acquisition and drilling of exploration wells in all licensed blocks.

The Minister of Energy gazetted additional petroleum blocks in two phases.

Phase one was in December 2006 when the Ministry of Energy increased the number of exploration blocks from the initial twenty-one (21) to thirty-seven (37). That number of blocks was in place until 22nd March, 2012 and by that time thirty (30) out of the 37 blocks had been licensed to 14 international oil companies.

Phase two was on 23^rd March 2012, when the number of exploration blocks was increased from 37 to the current 46. During that time, the Ministry had created nine (9) additional blocks.  One (1) in onshore Lamu Basin and eight (8) in offshore Lamu Basin Blocks. The offshore Lamu Basin blocks now extend up to the ultra-deep waters of the Indian Ocean within the Country’s Exclusive Economic Zone (EEZ) Boundary. 

Tullow Oil continues its 100% drilling success rate

Kenya has intensified its drilling activities and Tullow Oil is concurrently drilling its second and 3^rd well known as Twiga 1 in Block 13T and Pai Pai 1 respectively 1 in Block 10A. The Twiga 1 well will be the 35^th and Pai Pai 1 well the 36^th well to be drilled in the country.  Tentative results from Twiga 1 well shows that the well has encountered oil and is going to be a discovery when drilling operations are completed. 

Upon completion of Twiga1 well, Tullow Oil will commence mobilisation to drill its fourth well at another prospect tentatively called Kongoni in Block 10BB.

Anadarko begins its drilling campaign offshore Kenya

In addition Anadarko (K) Company will commence the drilling of two wells activities in Blocks L7 and L11B on back to back basis.  Anadarko has successfully discovered huge volumes of natural gas of about 70 Trillion Standard Cubic Feet (TCF) in Mozambique. Anadarko will begin drilling either between mid December 2012 or early January, 2013.

Also note that other oil companies such Afren, Ophir and BG Group will be drilling other offshore wells starting from next year 2013.

Oil revenues to reduce Kenya’s importation bill and enhance foreign exchange reserves

The ongoing accelerated oil and gas exploration and drilling activities in Kenya are encouraging especially if the efforts are sustained. As a result of these efforts, the country will be assured of significant socio- economic transformation in terms of wealth creation, and eradication of poverty. This will have the overall benefit of uplifting the standards of living of the citizens of this country. Currently, importation of crude oil and finished petroleum products account for more than 25% of Kenya’s total imports bill as was the case in 2011. 

On the flipside of it, the expenditure on these imports which stood at Kshs.330.71 billion (USD 3.85Billion) was more than 68% of the total foreign exchange earnings from Kenya’s commodity exports in 2011. Commercial discovery will therefore enable the country to realize significant savings of the foreign exchange earnings that are current expended on the importation of petroleum products into this country.

Kenya continues to fast track hydrocarbon exploration and production

It is the Ministry desire and strategy to put in place robust plans in fast tracking development and subsequent production of the hydrocarbons within the shortest time possible ahead of declarations for commercial oil and gas discoveries. The Ministry is benchmarking on Ghana and recently sent a high level delegation to West Africa and was impressed to learn that Ghana was able to fast track development and subsequent production of oil from offshore Jubilee field in 2010 just three (3) years after the declaration of a commercial discovery in 2007.

Kenya’s keen to learn from industry best practice and avoid mistakes of others

In order for Kenya to follow the example of Ghana, there is great need to start plans to put in place robust modalities that would guarantee transparency and accountability in managing oil and natural gas that will be discovered now and in the future. Since the announcement of oil and gas discoveries in Kenya, there have been a lot of concerns about:

1.     Oil being a curse and not a blessing

2.     Dutch Disease,

3.     Local communities where oil is discovered will be subjected to a raw deal regarding with respect to   revenue sharing, employment, compensation and resettlement and other related benefits that may accrue from oil and gas production.

Inspite of political transition in 2013 oil and gas investment secured

Despite political transition in Kenya in early 2013, the Minister for Energy will ensure that appropriate policies, legal and regulatory frameworks are in place to guarantee transparency and accountability in the production and management of the discovered hydrocarbons.

Enhancing and updating oil & gas policy to enhance investment in the sector

The Ministry has embarked on a process of putting in place suitable mechanisms and has already approached the World Bank and the African Development Bank to provide assistance in reviewing the current but old Petroleum Exploration and Production Act Chapter 308 of 1986. The World Bank will also assist in the develop natural gas terms. Many oil companies especially the BG Group are reluctant to proceed with the drilling of exploration wells due to lack of natural gas terms in the current Model Production Contract which has a bias on oil terms.

Consequently, the World Bank has already appointed a Consultant who is going to work in consultation with the Ministry in order to have statutes address areas of concern and other issues that may be necessary as per the standards and practices of the oil industry. Even before they approached World Bank, my Ministry had put in place a Task Force whose mandate was to review the Energy Policy and Energy Act with a view to aligning them to with the relevant articles on Energy minerals in the current Constitution of Kenya 2010. The Task Force has made good progress and during the month of October, 2012 it sought the comments and input of the Parliamentary Committee responsible for Energy at a workshop which was held in Mombasa.

Review of regulations to enhance Kenya’s stake and local content

The review of Statutes will also consider articles on levying Royalties or Capital Gains Tax in transactions where licensed oil companies or any of its Joint Venture Partners will decide to transfer their rights and interests in their Production Sharing Contracts to third parties with monetary gains being realized in favour of the holder of the PSC rights and interests.

The Ministry is also in the process of undertaking a comprehensive capacity building exercises to support upstream activities, starting with the recruitment of trainees with very good first degrees in Civil, Mining and Mechanical Engineering to be trained at Masters Level in Petroleum and Reservoir Engineering. Training at postgraduate level will also be undertaken in Geosciences, Law and Economics. As a long term capacity building strategy, the Ministry of Energy intends to engage a few local Universities in developing appropriate programs in these disciplines.

In addition, lower level tertiary training will be offered to ensure adequate staff complement for the upstream activities.  The other major challenge is to develop Local content capacity for effective and competitive participation in upstream subsector by the Kenyan nationals as active indigenous operators and/or Joint Venture Partners.

The revised Petroleum Act, will ensure the oil revenue is equitably shared between the National Government, County Government and communities where oil is found in a fair share formula.

Contract terms to be reviewed

The discovery of oil and natural gas in Kenya’s Sedimentary basins will lead to review of future PSC terms such as:

1. Open door policy for licensing of blocks will be replaced with Licensing bid rounds in due course
2. The  signature bonus per block will be reviewed upwards
3. Bank Guarantees, annual Training Fees, Surface Fees and related terms for new PSCs will equally be reviewed.
4. The discovery of natural gas in offshore Lamu Basin has greatly helped to put to rest the earlier perception that Kenya’s offshore had a high geological risk due lack source rock that host the necessary organic matter for generation of oil and gas. 

With this i wish you a happy new year.

Joint Coordinating Commission (JCC) for the Kenya – Uganda Refined Petroleum products Pipeline Tender: Expression of interest for Development of the Kenya – Uganda Refined Petroleum Products Pipeline, Closing Date 30/01/2013

REPUBLIC OF KENYA THE REPUBLIC OF UGANDA

JOINT COORDINATING COMMISSION FOR THE KENYA – UGANDA REFINED PETROLEUM PRODUCTS PIPELINE

KENYA – UGANDA REFINED PETROLEUM PRODUCTS PIPELINE

EXPRESSION OF INTEREST FOR A PRIVATE INVESTOR

The Government of the Republic of Kenya (GOK) and the Government of the Republic of Uganda (GOU) are desirous of developing a refined petroleum products pipeline from Kenya to Uganda (The Pipeline). The Pipeline is to be developed as a Public – Private Partnership (PPP) under a 20 year Build – Own Operate – Transfer (BOOT) arrangement.

The Joint Coordinating Commission (JCC) for the Kenya – Uganda Refined Petroleum products Pipeline, hereby invites Expressions of interest (EOI) from experienced firms/Consortia for pre-qualification to bid for project. The objective of this pre-qualification is to identify interested investors, with capacity and experience in developing similar projects to enter into a partnership with the two Governments to develop and operate the pipeline.

Scope of the project

The project consists of development and operation of a multi – product pipeline between Eldoret, Kenya and Kampala, Uganda, via Malaba at the border and Jinja in Uganda , a distance of approximately 352km.

The Pipeline will interconnect with the existing 14 inch diameters pipeline running from Nairobi to Eldoret and should be able to transport products to and from Kampala, Uganda and Eldoret, Kenya including a spur line to Jinja. The project will also include a common user depot at the pipeline terminal in Kampala.

Mandatory Requirements

      a) Language

i) The EOI and supporting documents must be in English.

b) Company Profile

ii) Name of the investor / lead including any joint venture partners who will participate in understating the pipeline development and their respective roles in alinspected of the projects cycle (including financing, preparation, design, construction operation and maintenance)

iii) Description of the management / organization structure. Joint venture / consortia agreement shall be required for collaborative ventures. Any prequalified consortium shall be required for collaborative ventures. Any prequalified consortium shall maintain the consortium members throughout the project development and for one year after the expiry of defects liability period.

iv) Certified copy of certificates of incorporation in the country of domicile

v) Name, office address, telefax number, email and cable address of the investor / lead investor or persons autopsied to received al correspondence.

vi) Signed resumes of key personnel endorsed by the investor / lead invest who will be involved in developing the project.

vii) Capability and experience in successful development, construction, operation and maintenance of a similar pipeline. Singed client references must be submitted.

c) Financial

viii) Audited financial statements / reports for the last five years preceding the date of the EOI or the investor / lead investor and each partner in the consortium.

ix) The investor /lead investor must have a minimum annual turnover equivalent to United States Dollars 500 million. Evaluation of the financial statements will be on the bidder’s financial strength as depicted by among others the return on capital employed. Liquidity and debt ratios.

x) Capability and experience in mobilizing project finance supported by financier’s references

d) Legal

xi) Disclosures regarding litigation the investor / lead investor (and consortium, members) in the last ten yeas

xii) Declaration of non involvement in corrupt practices including any citations or investigations of the investor. lead investor (and consortium members).

Applicants may be subjected to due diligence and will be required to corporate. The JCC reserves the right to reject any or all the Expressions of interest.

Only pre-qualified firms will be invited to bid. Written request for clarification may be submitted to the following office at the latest seven days before the closing date:

The Permanent Secretary

Ministry of Energy and Mineral Development

Amber House, Office No. C 109

29/33 KAMPALA Road

P. O. Box 7270

KAMPALA, UGANDA

Tel: 256 414 234733/4

Email: psmemd@energy.go.ug

Interested firms should submit one original and four singed copies of EOI in sealed envelopes clearly marked “Expression of interest for Development of the Kenya – Uganda Refined Petroleum Products Pipeline”, to the address so as to be received at the latest by Wednesday 30th January 2013, 1200 hours (East African time)

The Permanent Secretary

Ministry of Energy and Mineral Development

Amber House, Office No. C 109

29/33 KAMPALA Road

P. O. Box 7270

KAMPALA, UGANDA

Fax: 256 414 234732

Email: psmemd@energy.go.ug

The EOI will be opened at 1230 hours on the closing date in the presence of firm representatives who wish to attend.

Mr. Fred A. Kabangambe – Kaliilisa                                         Mr. Patrick M. Nyoike, CBS

Permanent Secretary                                                                Permanent Secretary

Ministry of Energy & Mineral Development                               Ministry of Energy

P. O. Box 7270                                                                         P. O. Box 30582 – 00100

Kampala, Uganda                                                                     Nairobi, Kenya 

Tullow Oil: Expression of Interest (EOI) for Environmental Survey Services

Tullow Oil plc is a large independent oil and gas exploration company and is a constituent of the London FTSE100.

The Group has over 85 licenses in more than 20 countries, with operations in Africa, Europe, South Asia and South America.

Tullow Kenya B.V., a subsidiary of Tullow Oil plc, is the operator in six license Blocks in Northern and Western Kenya.

Over the coming years Tullow will be carrying out an intensive exploration and appraisal program which will include 2 and 3 dimensional seismic surveys and multiple drilling rigs.To support the exploration activities, a significant number of environmental surveys will be required.

Tullow Kenya B.V. invites expression of interest from reputable Kenyan registered companies with the appropriate resources to provide the following services:
A) Carry out Environmental Impact Assessment Studies.
B) Carry out Environmental and Socio-economic baseline surveys in support of:-

• 2D Seismic Acquisition

• 3D Seismic Acquisition

• Drilling activities

C) Carry out Confirmation & Valuation Surveys.
D) NEMA Audits

Interested Companies/Consultants are requested to submit Expression of Interest to the office below not later than 21st December, 2012 at 1200hrs, after which a comprehensive pre-qualification questionnaire will be issued to identify suitably qualified candidates.

Contracts & Procurement Manager, Tullow Kenya B.V.Acacia Block, Westlands Office ParkWaiyaki WayNairobi, KenyaPostal: P.O. Box 63298 – 00619
E-mail: newsupplierskenya@tullowoil.com

Reference: Expression of Interest for Environmental Survey Services

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Oil & Gas: Downstream:

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GE targets Sh17.5bn local debt for wind farm

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Energy Regulation:

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South Sudan could resume oil exports through Sudan by the end of the year

South Sudan could resume oil exports through Sudan by the end of the year, the South's chief negotiator Pagan Amum said yesterday, after meeting with Sudan's defense minister and other officials in Khartoum. This is according to Reuters.

"By the end of this year, it is possible to load the first ship of oil, especially after the agreement in the meetings today and yesterday," Amum told reporters.

"Implementation will begin in the coming days," he added.

This will be good news for the two countries whose economies have been severely affected due to the stoppage of oil flows from the South oil fields.

South Sudan depends on revenues from oil for over 95% of its budget. While the North depends on toll taxes from the use of its pipeline and port by the south. This is after the south went with three quarters of the oil reserves at independence from the north in 2011.

Oil exports were shut down in January 2012 after hostilities based on accusations and counter accusations over an unresolved border dispute and sharing of oil revenues.