Energy & Mining
From The Report: Kenya 2018
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A stable and expanding energy supply is central to Kenya’s ambition to establish itself as an industrialised middle-income country, as set out in its Vision 2030 development strategy. The nation is fortunate in its energy mix: hydro, geothermal, solar and wind energy already play a significant role in power generation, and – particularly in the case of geothermal – there is room for further expansion. Recent oil finds in the South Lokichar Basin may soon feed into the segment and establish Kenya as a hydrocarbons exporter for the first time. For the private sector, the promulgation of the new Energy Bill and Mining Act promise to open up these closely related sectors to increased domestic and foreign investment. If fully implemented, the legislation can be expected to provide the necessary framework to support investment and the expansion of both sectors. This chapter contains interviews with John Munyes, Cabinet Secretary, Ministry of Petroleum and Mining; and Johnson Ole Nchoe, Managing Director and CEO, Geothermal Development Company.

Articles from this Chapter

Overview

Upstream interest: Increased capital investment adds to a strengthened and diversified energy offering
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A stable and expanding energy supply is central to Kenya’s ambition to establish itself as an industrialised middle-income country, as set out in its Vision 2030 development strategy. The nation is fortunate in its energy mix: hydro, geothermal, solar and wind energy already play a significant role in power generation, and – particularly in the case of geothermal – there is room for further expansion. Recent oil finds, meanwhile, may soon feed into the segment and establish Kenya as a hydrocarbons…

Interview

Petroleum potency: John Munyes, Cabinet Secretary, Ministry of Petroleum and Mining, on the future of petroleum and mineral policy
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Interview :John Munyes What strategy does Kenya need to implement to become an oil producer and exporter? JOHN MUNYES: Kenya is expanding its upstream discovery projections and after a number of decades of exploration, there have recently been discoveries in the northern Lokichar Basin. A variety of actors are carrying out explorations to find hydrocarbons offshore along the Indian Ocean and onshore in western counties like Baringo and Elgeyo-Marakwet. The discovery of oil in the north-western…

Interview

Geothermal development: Johnson Ole Nchoe, Managing Director and CEO, Geothermal Development Company, on effective exploration, human capital training and developing clean energy
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Interview :Johnson Ole Nchoe In what ways can other countries benefit from Kenya’s experience in developing clean energy? Johnson Ole Nchoe: The development of a long-term strategy such as Kenya’s Vision 2030 is a good example for other countries to follow, enabling them to establish a regulatory framework that helps advance the sector, such as the formation of specific institutions and special economic zones. These kinds of initiatives remove initial risks, channel funds for the development…

Analysis

Hot topic: Reforms seek to tap geothermal assets to support regional development and improve fiscal solvency
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A new Energy Bill – which completed its public consultation phase in February 2018 – may result in a significant shake-up of Kenya’s geothermal segment. Significantly, the draft legislation lays out a royalties schedule. The raft of laws has been passed by the National Assembly but was still awaiting Senate approval as of September 2018. The bill will see geothermal firms pay fees of between 1% and 2.5% of the revenues generated from the energy source during their first decade of operation…

Analysis

Unlocked potential: New mining law provides domestic and international investors with greater clarity
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Kenya’s first mining laws were promulgated in 1940. The Unwrought Mineral Act and the Diamond Industry Protection Act served as the legislative backbone of the industry for more than 70 years, during which the sector seldom accounted for more than 1% of the nation’s GDP. The slow growth of Kenya’s mining industry was in contrast to its East African neighbours Uganda and Tanzania, both of which found success shortly after gaining independence – the exploitation of their mineral resources generating…