OrPower secures Sh3.9bn loan for Olkaria project in Kenya

US energy firm OrPower 4 has receivedan additional Sh3.89 billion loan for the completion of its 100 megawatt Olkaria III geothermal project in Naivasha, Kenya, boosting the country’s quest for sufficient supply.

The amount forms the final draw from a Sh26.06 billion loan from the Overseas Private Investment Corporation (OPIC), an agency of the US government, through Ormat Technologies, Orpower 4’s parent company.

“This drawdown will be used to complete the final phase of construction at the Olkaria III complex in Naivasha, bringing the geothermal power plant capacity to over 100MW,” Ormat CEO Dita Bronicki said.

In May, Ormat began commercial operations of its Plant Two within the Olkaria III complex, increasing the company’s total generating capacity by 36 MW to 611 MW worldwide. Ormat also plans to add 16MW of generation by building a third plant, which it expects to complete in 2014.

Once Plant Three is complete total capacity at the Olkaria III complex will reach 100MW. The power is sold under a 20-year power purchase agreement (PPA) with Kenya Power.

Kenya has embarked on a wide range of renewable power generation projects in a bid to reduce dependence on unreliable rain-fed hydroelectric and thermal power.

Geothermal power investors get African Union backing for exploration costs

The African Union Commission (AUC) has invited geothermal power investors to apply for grants to fund initial exploration costs within the next one month.

The AUC partners with other donor organisations will finance geothermalenergy investors with an aim of promoting wide use of the renewable source of power in Africa.

On Wednesday, the commission signed a Sh722 million ($8.4 million) guarantee financing with the Africa Geothermal International Kenya Limited (Agil), which is exploring with a view to producing140 megawatts of electricity at Mt Longonot in Naivasha, Kenya.

“We will give infrastructure grants of up to 20 per cent of the costs… We will also offer surface study grants of up to 80 per cent of the costs excluding infrastructure costs,” said Rashid Abdallah, an energy expert at the Regional Geothermal Coordination Unit of the AUC.

The guarantee to Agil is only part of the Sh52 billion ($600 million) the company expects to spend on exploring, drilling wells and producing geothermal power at Longonot in the next five years. Drilling of wells is set to begin next April.

The AUC is collaborating with Germany’s development finance institution, KfW, in granting Agil the Sh722 million guarantee.

The funding offer by AUC is in line with a programme it initiated in 2010 through which itassists countries and regions to minimise the exploration risk associated with geothermal resources by funding the up-front cost, developing policy guidelines as well as institutional and regulatory framework.

The AUC also offers drilling grants of up to 40 per cent of the costs for the exploration, drilling and testing programme for reservoir confirmation wells, said Mr Abdalla during the signing for the Agil-AUC deal in Nairobi.

AUC is to fund a total of three projects in Kenya which succeeded in the first round of applications for grants. Out of the five projects that succeeded in the East African region, three are in Kenya and two are in Ethiopia.

In Kenya, the three projects are by Agil, government-owned Geothermal Development Company (GDC) and privately-owned WalAm Energy Inc. GDC is drilling at Bogoria-Silali area while WalAm is drilling at Suswa.

During the Agil-AUC signing ceremony on Wednesday, Energy Principal Secretary Joseph Njoroge said the country hoped to reduce the cost of power by 40 per cent once the major geothermal projects deliver power to the national grid by 2018.

“We expect that the geothermal power projects should help us reduce the cost of electricity in the coming years. Power prices should come down by 40 per cent within the next 40 months,” said Mr Njoroge.

The PS said increased power from geothermal production would help operate the standard gauge railway as speed trains are expected to run on it.

Agil chief executive Fassiné Fofana said the project will employ up to 1,000 people during the construction phase.

By Geoffrey Irungu
Source: Business Daily

Tullow strikes oil in new well.

“Tullow, through an e-mail on Thursday morning informed me of the discovery at the Agete well after drilling 1,930 feet,” Mr Chirchir told the Parliamentary Committee on Energy, Communication and Information last week.

Tullow says that the Agete-1 exploration well in Block 13T, onshore Northern Kenya, has discovered and sampled moveable oil with an estimated 100 metres of net oil pay in good quality sandstone reservoirs.

“A fifth consecutive oil discovery onshore Northern Kenya highlights the emerging world class exploration and production potential within our rift basin acreage.

An intensive campaign for 2014 includes appraisal and exploration within this first basin and pioneering wells targeting the prospectivity throughout the entire chain of similar rift basins,” Angus McCoss, Exploration Director, Tullow in a statement send to the media.

The commercial viability of the Lokichar find is yet to be ascertained, but hopes are rising that Kenya could become a petroleum producer and exporter.

This marks the first major announcement since Tullow Oil restarted operations in northern Kenya on November 8 after reaching a deal with local leaders to prevent a repeat of protests that halted work last month.

Tullow has operations on five on-shore blocks in Kenya, including 10A, 10BA, 10BB, 13T, 12A and 12B and a non-operated partner in off-shore block L8 where American exploration firm Apache Corporation is searching for oil.

Ethiopia wind farm starts production

Africa's biggest wind farm has started production in Ethiopia, aiding efforts to diversify electricity generation from hydropower plants and help the country become a major regional exporter of energy.

The country on the Horn of Africa is plagued by frequent blackouts. It plans to boost generating capacity from 2 000 megawatts (MW) to 10 000 MW within the next three to five years, much of it coming from the 6 000 MW Grand Renaissance Dam under construction on the Nile. The plan also consists of raising wind power generation to more than 800 MW and geothermal capacity to more than 100 MW within that period.

This shows that the Ethiopian government is committed to increasing its energy capacity. It also indicates to the outside world that the country is plagued by less of the socio political issues that stall or slow down projects in other African countries. Political will on projects is normally enough to get the job done.

Africa Energy Experts Convene in Denver

Press Release

Contact: Dr. Luka Powanga

303 458 4023  Lpowanga@thepowangagroup.com or Lpowanga@regis.edu

“Africa Energy Experts Convene in Denver”

Access to affordable, reliable, clean and economically viable energy supply is essential to Africa's economic growth and human development. Africa is well endowed in energy resources and has the potential to develop these resources to help create, grow and maintain vibrant global economies.

On November 7-8, 2013, hundreds of executives, policy makers and thought leaders from the private sector, national governments, non-government organizations, and academia from across the globe met at Colorado School of Mines in Golden Colorado (near Denver) for the Annual Energy Africa Conference to dialog, collaborate, encourage, invest in and support the work needed to supply clean, reliable and affordable energy in Africa. 

The focus of the conference was on President Barack Obama’s recently announced “Power Africa” initiative, and how Africa can leverage the synergy between natural gas and renewable energy sources to meet the current and future energy demand and the business opportunities inherent in the effort.

Prominent speakers and delegates included, Dr. Bill Scoggins, the President of Colorado School of Mines, Melvin Foote, the President and CEO of the Constituency for Africa in Washington, Michael Masserman, Executive Director for Export Policy and Strategy, United States Department of Commerce, Ambassador Irene Giner-Reichl , the Austrian Ambassador to China and Mongolia, Honorable Liberata Mulamula, the Tanzanian Ambassador to the United Stated, Honorable Palan Mulonda, the Zambian Ambassador to the United States, Honorable Jesca Eriyo, the Deputy Secretary of the East African Community based in Arusha Tanzania,  Michael McKelvy the president of Ch2Mhill, Dr. Ogunlade Davidson, the former Minister of Energy in Sierra Leone and now the Dean of the Graduate School at the University of Sierra Leone, Laetitia Mulamula, the Vice President of the Eastern Africa Diaspora Business Council, Professor F.D. Yamba, the Director for the Center for Energy Environment and Engineering in Lusaka, Zambia, Dr. Robert Stoner, the Deputy Director at the MIT Energy Initiative at the Massachusetts Institute of Technology and Co-Director of the Tata Center for Technology and Design and Christian Burgsmueller, the legal counsel for the European Union delegation to the United States.  Major corporation and institutions such as General Electric, Shell, the World Bank, Holland and Hart, Anadarko, EnCana Oil and Gas, Noble Energy, Regis University, Denver University, the World Trade Center, the ONE Campaign, and the Colorado Office of Economic Development were represented. 

The speakers highlighted the need to establish an energy infrastructure that meets the energy demand in Africa to ensure the current economic growth is maintained or even enhanced and how the synergy between natural gas and renewables could be leveraged to meet this objective.

With the help of several examples, honorable Liberata Mulamula, Palan Mulonda and Jesca Eriyo emphasized the business and investment opportunities available in the Energy Sector in Africa. They cited many areas of collaboration including the private-public partnership and how the issues of investment constraints that had in the past plagued the continent have been removed to catalyze investment and growth. Michael Masserman focused on the role that the Power Africa initiative will play in enhancing energy development in Africa and the business opportunities that this initiative presents.  Melvin Foote, the President and Chief Executive Officer for the Constituency on Africa stressed the importance of diaspora in the Energy infrastructure development in Africa.  He also stressed that companies wanting to do business in Africa, need to take into consideration the thoughts, ideas and aspirations of the next generation, who will be reluctant to accept corrupt business practices of the past.

The Energy Africa conference was well received by participants.  Hellen Kassa, with the Silicon Valley Technology Partners remarked,  “Thank you so much for putting together such an amazing conference. I honestly learned so much and was impressed at the level of diversity not only in speakers and attendees but at the topics covered and the level of expertise each speaker possessed”.   Leroy Wilson, a New York Attorney thanked the conference organizers for “doing an outstanding job!”   Dr. Ogunlade Davidson echoed these observations, “This well organized event provided an excellent opportunity to meet our American friends working on the same issues and this should continue as that will contribute greatly towards providing sustainable energy for all in Africa”.  Ambassador Irene Reichl remarked that “What made "Energy Africa" very special for me is that it draws on the hands-on experience of many experts from the energy sector and this enriches the dialogue on energy and sustainable development in an important fashion.”    Hon. Jesca Eriyo summed her experience at the conference: "The Energy Africa conference brought together academicians, experts, practitioners, CEO/business persons, and African Diaspora in the Minerals, Petroleum/Oil and Gas, power sectors as well as students. It was really enriching to listen to and participate in a very lively discussion throughout the conference, and to notice the enormous interest in investing in the Energy sector in Africa.”

Conference organizer Dr. Luka Powanga, who teaches at Regis University in Denver and operates a strategic consulting firm, “The Powanga Group”, was very pleased with the outcome of the conference.  Dr. Powanga noted that the conference highlighted the fact that Africa is clearly emerging and changing rapidly both in terms of economic growth and development and improved business environment.  Said Dr. Powanga, “Business opportunities for American energy companies are abundant in all aspects of energy development on the continent.  We are looking forward to playing a useful and pragmatic role in helping to build a strong US Africa energy partnership going forward”