C O M P A N Y O V E R V I E W
GULF POWER Energising Kenya’s growth Written by: Nye Longman Produced by: Anthony Munatswa
4
GULF POWER
Gulf Power entered Kenya’s energy market in December 2014
Using its recent HFO power plant as a model, Gulf Power has developed a socially, economically and environmentally sustainable model for sustained growth
5
G
ulf Power is a special purpose vehicle for the construction and operations of an 80 MW medium speed diesel power plant in Kenya. Gulf Power entered Kenya’s energy market with its $112 million, 80MW, Medium Speed heavy Fuel Oil (HFO) power plant which became operational in December 2014. This commissioning was in the wake of many challenges and opportunities: in what is quickly becoming a crowded sector, Norman Wanyiri and his team have optimised the business for consistent performance well into the future. Operations Gulf Power received high profile funding to construct its plant from both the International
ENERGY
Finance Corporation (IFC) as well as the OPEC Fund for International Development (OFID) which together contributed about $75 million. This is a solid indication that the plant is part of the country’s short and long term Least Cost Power Development Plan and is thus worthy of international funding on this scale. Wanyiri noted that financial endorsement from the IFC and OFID also brought with it the requirement to adhere to the highest global standards in management practices, as well as environmental and social initiatives which in turn ensured that the plant was built in line with global technological and engineering standards. The HFO power plant at Athi River near the capital Nairobi is a state of the art project and is
112m Amount in USD that Gulf Power’s power plant cost
w w w. g u l f p o w e r. c o . k e
6
v
info@vivaafricallp.com www.vivaafricallp.com
Specialist legal and financial tax consultants
Viva Africa Consulting LLP (VACL) is a specialised legal and financial tax advisory firm providing tax advice in personal, business and investment matters. VACL comprises of some of the leading experts in East African taxation, all of whom have gained their experience from many years of practice with a ‘big four’ a professional firm.
3rd floor, Kiganjo House Rose Avenue, Off Denis Pritt Road. P. O. Box 50719-00200 Nairobi.
7
Tel:
+254 +254 Mob: +254 +254
20 2465567 20 2699936 725389 381 733248 055
GULF POWER
ENERGY
the first of its kind, Wanyiri said: “Up until now, Independent Power Producers (IPPs) in Kenya have been dominated by foreign investors. Gulf Power is the first IPP to be fully owned by indigenous local Investors.” Aside from infrastructure challenges, it is interesting to note that the HFO plant faces competition from other players at this stage. For instance, Wanyiri noted that there had already been several major renewable energy commitments across the country, including the construction and commissioning of 280MW geothermal power plants in the fourth quarter of 2014. Gulf is however confident of higher dispatch factor in the future, since two thirds of Kenya’s population is still without electricity, he said: “We have the potential to grow if required; just by using our current installed infrastructure, we can Two thirds of Kenya is still without electricity
Key Personnel
Abubakar Ali Chief Finance Officer Abubakar is a fully qualified Finance Expert and Leader with vast experience of leading financial strategies to facilitate companies’ ambitious growth agenda. He possesses proven ability to constantly challenge and improve existing processes and systems for optimal efficiency in achievement of business projects. His professional demeanor is excellent and his negotiation capabilities are valuable to any business.
w w w. g u l f p o w e r. c o . k e
8
GULF POWER expand the current capacity by another 40MW by adding additional generating units.”
Norman Wanyiri, General Manager
Talent Management. The HFO plant directly employs 10 professionals, as well as an additional 40 people indirectly through operational and maintenance contract with Wärtsilä Eastern Africa, Since the plant has only been operational since December last year, training requirements have focused mainly around ensuring that the plant and its staff meet both Kenyan statutory requirements, as well as extra safeguards outlined by the World Bank, Wanyiri said: “At the moment we
Challenging the status quo in Energy in Africa
POWERING TOMORROW’S PROGRESS TODAY.
We’re proud to be there to help Gulf Power and the larger Gulf Energy group bring clean energy solutions to life.
citi.com/progress
© 2015 Citigroup Inc. Citi and Citi with Arc Design are registered service marks of Citigroup Inc.
Some strive to give energy to solutions that spark commerce and growth, and what they need today is an ally to help them deliver a more ecological, sustainable tomorrow. What if a bank made that its job? We think a bank should.
Dentons has been engaged in Africa’s dynamic and exciting energy markets for decades. Our long track record on the continent means we have a thorough understanding of the political, economic, regulatory and legal issues that surround doing business in East Africa. Our world class team of energy lawyers are proud to have advised Gulf Power on the Athi River 80 MW heavy fuel oil power project. We wish Gulf Power every success in their venture.
dentons.com © 2015 Dentons.Dentons is a global legal practice providing services worldwide through its member firms and affiliates. Please see dentons. com for Legal Notices.
ENERGY
are conducting statutory training; our employees have been trained on occupational health and safety, first aid and emergency preparedness. We also plan to empower some of our engineers in specialised electrical and mechanical engineering courses in power plants.” Social Responsibility Although the facility only requires a lean team, Gulf Power recognised early on the opportunity to integrate corporate social responsibility into its daily operations. Wanyiri noted that not only did the business have several dedicated social and environmental programmes in place, this was also implemented by a specialist community liaisons officer. He said that the community liaisons officer immediately had his work cut out; he said: “Before and during the construction phase, the local community wanted to know exactly what would happen to their neighborhood and if there would be any adverse effects to the community.” He added: “Through this liaisons channel that we had established between the business and
Inside the power plant
“Currently, only 30 percent of Kenyans have access to electricity and, with the government aiming to double this figure in coming years, Gulf Power’s expansion in the country could not be timelier” – Norman Wanyiri, General Manager w w w. g u l f p o w e r. c o . k e
10
GULF POWER
Engine Hall
11
the community, we were able to assure them that there would be no environmental and social adverse effects.” Echoing its future-oriented business plan is Gulf Power’s focus on investing in the country’s future leaders and workforce. Wanyiri said: “We plan to provide 2 prefabricated classrooms to one of the schools in the area this year and we may provide more in the future so we can further ease congestion and give the children a better learning environment.” The company also plans to supply educational materials, as well as mentoring future
ENERGY
potential leaders. Combining its management team’s experience with solid financial backing, the company is aiming to provide mentoring and scholarships to disadvantaged students. Wanyiri added: “Some Bright children often may not make it to join the best schools because they cannot afford to pay the required fees, so we are planning to fund several of them through high school and university, while giving them support they need to remain focused through mentoring.” For Gulf Power, social responsibility is not limited to signing a cheque; it understands that its contributions strengthen the communities and the individuals within them, providing many with the opportunity to traverse the limitations of their circumstances. Furthermore, in order to mitigate its environmental impact, Gulf Power is exploring the option of using solar panels to meet some of the plant’s energy needs; it has also undertaken an extensive tree planting programme around its facility which will lock in carbon for generations to come. Currently, only about 30 percent of Kenyans have access to electricity and, with the government aiming to double this figure in coming years, Gulf Power’s expansion in the country could not be timelier. Positioning itself in the Kenyan market as a socially and economically responsible energy provider will not only give the provide the company with the diverse revenue base it needs, but also sets it up to grow in capacity as the Kenyan economy develops.
Company Information INDUSTRY
Energy HEADQUARTERS
Athi River FOUNDED
2007 EMPLOYEES
50 direct and indirect REVENUE
$48 million PRODUCTS/ SERVICES
Energy provider
w w w. g u l f p o w e r. c o . k e
12
T +254 20 498 2101 F +254 20 272 5256 info@gulfpower.co.ke ww.gulfpower.co.ke PO Box 21754, Athi River Machakos, Kenya, 00100