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The East African : May 24th 2015
52 MAY 23-29,2015 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 4,879.95 -2.02% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,729.48 -0.43% USE All Share Index Uganda 1,904.00 -0.73% RSE All Share Index Rwanda 136.08 -0.07% JSE All Share Index South Africa 54,116.97 -0.11% NGSE All Share Index Nigeria 34,272.09 -0.50% Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 tion could be coming to an end after the government licensed the first private integrated company in the sector. Powerhive East Africa, a wholly owned subsidiary of US microgrid solutions provider Powerhive Inc, was early this month given a concession by the Energy Regulatory Commission to generate, distribute and sell electricity in Kisii and Nyamira Counties in Western Kenya. Only a tenth of the population in the counties has access to electricity and Powerhive is targeting 200,000 households for its supplies. The concession, however, restricts the company to rural areas not currently on the national grid. “It could become a game changer in Kenya’s history; more investors will have confidence to explore the Kenyan market,” said Einstein Kihanda, chief investment officer at ICEA Asset Management. Powerhive is banking on financial and technical backing from First Solar US fi≥m switches o≠ Kenya Powe≥’s monopoly K enya Power’s monopoly of electricity distribu- Jan ‘15 Feb Mar Apr ‘15 as maize milling, welding, incubating chickens and hair salons. “It will enable us to cost- effectively reach tens of millions of people in rural villages unserved by grids while offering strong riskweighted returns to investors,” said Powerhive CEO Christopher Hornor. Kenya Power Ltd has Kenya Power employees repair damaged cables. A new company has now been licensed to supply electricity in two counties in western Kenya. Picture: File Inc, a leading global provider of photovoltaic (PV) solar energy solutions to generate energy locally in Kenya’s rural areas. The development comes at a time when the Kenya Electricity Generating Company Ltd (Kengen), which is responsible for the production of 80 per cent of the power consumed in the country, is seeking alternative energy sources including geothermal and wind to boost the national grid. Kengen is seeking to pro- duce at least 5,000 Megawatts of geothermal power by next year in order to spur industrial growth. Kengen’s total installed capacity grew by 28 per cent from 1231MW in December 2013 to the current 1,575MW. Earlier in the year, the power producer announced its intentions to raise Ksh15 billion ($152 million) through a rights issue to finance expansion of its power generating capacity. The Kenyan government said it has set aside $2 billion in the medium term to upgrade its power distribution infrastructure. The licensing of Power- hive followed a successful two-year pilot stage that saw Powerhive generate 0.08 MW, serving four rural villages and benefiting over 1,500 people, ranging from residential users to small businesses. Soon, the residents were enjoying a range of services that were previously unavailable such been marred by inefficiencies in power distribution including blackouts and failure to serve most of the rural areas despite receiving connection payments. The company owes 19,000 applicants who have waited for three years a total of Ksh665 million ($6.8 million) to be connected. “With new competition, Kenya Power will be seeking to execute its mandate of electrifying as many households as possible to ensure it does not lose out to the competition,” said Mr Kihanda. Ben Chumo, Kenya Pow- er chief executive, said the company was working to connect the customers who had already paid for the service. Total Uganda tax dispute goes to Wo≥ld Bank t≥ibunal TOTAL HAS instituted arbitration proceedings against Uganda over a dispute about upstream oil activities in the Albertine basin. Total E&P Uganda BV is rep- resented by Fried Frank Harris Shriver & Jacobson in the case filed on March 20 at the International Center for Settlement of Investment Disputes (ICSID), a World Bank tribunal. Industry sources said the dispute relates to Uganda Revenue Author- ity (URA) imposing stamp duty of about $30 million on Total’s acquisition of block 2. The French oil major argues the production sharing agreement provided for a tax waiver. ICSID said a tribunal was yet to be constituted for the case. “The secretary-general Meg Kin- near registers a request for the institution of arbitration proceedings,” said ICSID in a public notice, which did not disclose further de- tails. Total has invoked the provisions of the Bilateral Investment Treaty contract signed by The Netherlands and Uganda that came into force in 2003. Oil blocks Total and the China Nationla Offshore Oil Corporation (CNOOC) in 2012 acquired three exploration blocks in the Albertine basin in western Uganda from Tullow Oil Plc in a transaction valued at $2.9 billion. The deal allowed Total and the Chinese firm to take up a third of each oil exploration block. “Total E&P Uganda has been obliged to also demobilise staff, both in the field and in Kampala. This process started in December 2014 with the demobilisation of expatriates and now with locally recruited staff,” said Total corporate affairs manager Ahlem Friga-Noy in a statement. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories EA capsicum likely to lose EU ma≥ket EAST AFRICA risks losing its European Union capsicum market over inability to control a moth. Uganda has stopped export- ing capsicum to the EU after interceptions where the crop was found to be a contaminated with False Codling Moth (FCM), a pest unique to Africa. In Kenya, some capsicum has been intercepted, according to the Fresh Produce Exporters Association of Kenya (FPEAK). “Our capsicum has already been intercepted several times from late last year and we risk losing the market if something is not done,” said FPEAK technical director Francis Wario. Although FCM is not a quar- antine pest currently, the EU member states are planning to pass a law against any produce contaminated with the insect. Fresh produce earns Kenya Ksh60 billion ($618 million) a year. Last year, the Ugandan government released a checklist for exporters to ensure only quality capsicum is exported to the EU.
May 17th 2015
May 31st 2015