Figure 4.52 VC waste collection and processing possible actors

Case Study 4.29 - The Gorge Farm Energy Park, Kenya159

Since 2016 the Gorge Farm Energy Park in Naivasha has been producing two megawatts of electricity, which is used at Gorge Farm itself, owned by the Vegpro Group, and has sufficient surplus to meet the power needs of 5,000 to 6,000 rural homes.

The Energy Park also generates heat for the farm’s greenhouses, and fertiliser which can be used by local farms, displacing the need for synthetic fertiliser. The Energy Park processes 50,000 tonnes of Gorge Farm’s organic residue to produce biogas, through anaerobic digestion, and 35,000 tonnes of fertiliser. The biogas is burned in two engines to produce the electricity and heat. It is estimated that producing the same amount of electricity and heat using diesel would require five million litres of fuel annually, plus the extra fuel required to transport the diesel from Mombasa. The use of biogas to produce the electricity is also estimated to save 7,000 tonnes of carbon dioxide emissions annually.

Biojoule Kenya, the independent power producer that operates the Gorge Farm plant, sells the power to Gorge Farm and to Kenya Power and Lighting Company for US$0.10 per kilowatt hour. Diesel-generated power, by contrast, costs US$ 0.38 per kilowatt hour to produce. Tropical Power supplied engines for the Energy Park, in conjunction with Clarke Energy, a UK-based engine service provider and by locating the plant very close to the grid interconnection point, engineering challenges were minimised. The project is seen as an example of how locally-produced feedstock can be used to generate clean and cost-effective power for Kenya. A policy analyst at the Kenya Institute of Public Policy Research and Analysis believes biogas could generate between 29 to 131 MW of power in the country.

159 Reuters, Kenya energy biogas (2021), Available at: https://www.reuters.com/article/kenya-energy-biogasidUSL5N1EZ1KL (Accessed:03/12/2021). 160 Bio mass magazine, Bringing AD to Africa (2021), Available at: Bringing AD to Africa | Biomassmagazine.com, (Accessed: 03/12/2021) Figure 4.52 VC waste collection and processing possible actors

Sludge Collection

PPP: LAWASCO / SMEs

Processing BSFL / Charcoal

PPP: Flipflopi / TakaTaka

Household Waste Collection

Community Groups SMEs

Public Waste Points - Sorted

Community Groups SMEs

Separation / Sorting

PPP: Flipflopi / TakaTaka

Clean Ups - Mangrove

Community Groups SMEs

Source: Atkins analysis

PET

Aggregation & Shipment to PETCO

Flipflopi / TakaTaka / PETCO

Other Plastics Production of Lumber, Boats, etc

PPP: Flipflopi / TakaTaka

4.5 Maritime Trade, Transport and Future Industries

4.5.1 LAPSSET aspirations in Lamu

LAPSSET presents a significant opportunity for economic development for Lamu not only to develop as a gateway and transport hub to Kenya and East Africa but also as a strong incentive to establish export-orientated manufacturing and agri-processing industries within the Municipality. The development of the port in Manda Bay and the Special Economic Zone (SEZ), along with the other components of the LAPSSET corridor (such as the railway, airports, resort city) is highlighted as a flagship project under Vision 2030 and identified in the National Spatial Plan as crucial to spurring growth in northern parts of the Country which will help with the re-distribution of urbanisation and economic opportunities.

The development of a port at Lamu will allow for relief of the congested Port of Mombasa and provide the opportunity to develop export-orientated manufacturing and industries, a deep-sea fishing port, as well as those that make use of global value chains, in Lamu. The development of the Port was also meant to support the export of oil following its transport to Lamu along the LAPSSET corridor.

The Port Industrial Area and SEZ will provide the employment land and infrastructure required to support industrial and agri-processing activity. These activities will add value to agricultural and livestock produce by communities along the LAPSSET corridor and to fishing activities based around Lamu. Manufacturing activities in other sectors, for example construction materials, will also provide employment opportunities. The Port will allow for the export of products, particularly heavy goods, as well as access to imported goods and other manufacturing inputs where these are required. The Special Economic Zone can provide an environment that attracts investment in manufacturing and other industries including logistics and services-related activity. The proposed development of a Resort City can further help to develop Lamu’s already strong tourist offer. Current assets include the natural environment and cultural heritage, particularly the UNESCO World Heritage Site of Lamu Old Town. In addition, development of the Port, SEZ and Lamu Metropolis will increase demand from business tourism. As demand for travel to the area increases, either for business or tourism purposes, the current airport infrastructure may prove inadequate, requiring investment in the upgrading of facilities to allow further air connections and routes to serve Manda.

Current Activity

Currently only the first berth at LAPSSET port is operational in the new port, while the second and third berths are 95% complete and should be operational by mid-2022. Data from Kenya Ports Authority (KPA) shows ten ships have docked at the new port since 20th May 2021 when the first berth was launched. The port is intended to complement Mombasa Port for transhipment purposes with immediate target markets being the Middle East and Pakistan, while smaller feeder ships will service the East Africa region and potentially other Indian Ocean Island nations such as Madagascar. There is also a site set aside for a livestock holding zone for exports to the Middle East, while there has been some initial interest from potential investment in food processing, wood and lumber, automotive imports and distribution, and warehousing and logistics to service East African landlocked countries.

Phase 1 of the project in Lamu (c. 460 ha of employment land) consists of an initial three berths and accompanying logistics area (64 ha) and some 85-ha developed in close proximity to the port as shown in Table 4-45. The oil storage and loading facility will be developed within the port zone. The initial phase of the Resort City (28 ha) was also expected to be built out and the first phase of the residential township would be established around a neighbourhood centre.

Table 4.45 Initial Development Phase

Development strategy

Key development statistics

> Total labour demand: 21,900 > Total population: 56,800 > Total households: 19,300 > Capacity to house 64,900 people, or 22,100 units. > Power demand: 75 MW > Water demand: 14,900 m3/day

Source: LAPSSET investment framework

4.5.2 Potential future activity in Lamu

The Lamu Investment Framework161 sets out potential economic activities that could be accommodated within the SEZ. However, these are not based on a detailed demand assessment to determine viability and scale but rather, consideration is given to similar examples of Special Economic Zones globally and an assessment of demand drivers regionally. It is worth noting that the Investment Framework was completed pre-CVOID-19. In light of current global economic conditions and emerging priorities post COP26, the mix of potential industries located within the SEZ could considerably change and/or be delayed. For example, heavy industrial uses might prove unsustainable both environmentally and also financially. However, key identified industrial activities such as food processing remain relevant and align with priorities coming out of the Lamu UEP.

As noted above and in section 3.5, the spatial strategy of the UEP, to bolster and promote balanced economic development across the Municipality, is to leverage off activities and infrastructure investments associated with the LAPSSET Port and SEZ activities, as well as the future Port City Metropolis development. For example, the urban centre of Mokowe has been identified as a key location for initial UEP VCs that can benefit from the future opening-up of access to supply chains and markets (local, regional and global) enabled by the LAPSSET node development.

Key activities from the Investment Framework are presented below and considered relevant domestic demand drivers including GDP and population growth, inward investment and investment in infrastructure. Production activities oriented towards export opportunities, whether making use of local inputs or integrating into global supply chains, have also been considered. The assessment of potential activities presented within the Investment Framework draws on examples of the development of industrial zones in East Africa and internationally and an assessment of Kenya’s competitive advantages and contextual factors.

161 Atkins Acuity, Lamu Port City Agreed Investment Framework (2017). Table 4.46 Potential activities within Lamu SEZ

Sector Main products Specific activities

Metals processing Steel Long and flat steel products service centres Stamping/pressing of steel/aluminium sheet Welded steel tubes Hot-dip galvanising facilities General machine shop facilities Fabrication workshops Focus on domestic demand. Drivers: GDP and population growth; Urbanisation; Investment (infrastructure); Growth of industrial activity; Consumer disposable income; Substitution by other materials.

Copper Copper tube manufacture Brass castings

Aluminium Aluminium extrusion facilities Aluminium foil mills Aluminium casting facilities

Building materialst Aggregates Sand, gravel and crushed stone

Cement Cement plant Clinker grinding plant

Light manufacture building products Pre-stressed and pre-cast concrete products Ready mix concrete factories uPVC windows and doors Float glass and glass panels (IGU) Plasterboard, cement board

Light manufacturing Apparel Apparel and textiles. Facilities often specialise in a particular operation or component, e.g. patterns, cutting, embroidery, trims, etc.; or assembly. Globalised supply chains; Competition in clothes retailing; Shift in manufacture away from East Asia; Abundance of low skilled labour force in East Africa; Established export-oriented industry in Kenya; Market access (e.g. AGOA).

Furniture and wood products Market drivers

Focus on domestic demand. Drivers include: GDP and population growth; Urbanisation; Investment (infrastructure); Growth of industrial activity; Consumer disposable income; Substitution by other materials.

Local expertise

Sector

Food and beverage sector Storage facilities Flour production Frozen fruit and vegetables Fruit and vegetables preserved in containers Beverage production Food packaging facilities Meat processing Fish processing Edible oils

Pasta/noodles/couscous Vegetables/potato crisps and snacks

Heavy industrial facilities Main products Specific activities

Metallurgical facilities Basic chemicals

Petrochemicals

Tourism Leisure tourism Coastal resorts

Ecotourism

Cultural heritage Cruise tourism Economic growth and disposable incomes (domestic and international); Consumer choices (e.g. ecotourism); Perception and marketing of Kenya/ Lamu (e.g. security concerns). Industrial development of area to drive business tourism.

MICE/Business tourism

Source: LAPPSET investment framework Market drivers

Similar drivers apply domestically and internationally. These include: population and economic growth; disposable income; shifts in consumer choices (e.g. increasing meat and soft drinks consumption, demand for packaged or processed foods); Kenya as a major agricultural producer.

Significant capital investments. Require large, accessible markets due to large production capacity of plants. Other key investment criteria: raw material availability (ores, gas, oil); energy costs.

The Investment Framework also details the potential physical requirements by sector.

Table 4.47 Sector requirements

Sector Locational requirements Infrastructure requirements Environmental concerns Typical lot/plot size

Metal processing sector Good access to road/ railway network Reliable supply of low-cost electricity or gas Air pollutants Water pollutants 1-2 ha for smaller workshops to 10-20 ha for larger facilitie

Building materials: heavy industrial sector Depends on facility: if clinker grinding plant, then next to port, or close to raw materials source Energy intensive Noise, dust and air pollution. 10 ha

Light industry Close to road/rail network Medium-low energy intensity More limited

Apparel manufacture Access to power and workforce Less energy intensive - reliable power supply More limited

Food and beverage sector

Heavy industrial facilities Close to water source Significant quantities of water, energy intensive Wastewater and emissions to air (flue gases, dust and odour) various

Safeguarding site close to the port Energy intensive, fresh/sea water for cooling purposes Air pollutants; odour; water pollutants; safeguarding areas for hazardous facilities. 300 ha per industry sector

2ha -6 ha

< 1Ha

Source: LAPPSET investment framework

It is important to note that whilst the central Government has financed much of the initial port construction, including the access roads from the regional road network, any future ongoing developments are to be driven by private investors and operators and this will include the roll-out of further infrastructure to enable the commercial and industrial port areas, along with the SEZ to be developed. Given this reality, along with the many global uncertainties with regards the COVID-19 pandemic as well as geo-political events and outcomes, it is difficult to project a future development trajectory or phasing for LAPSSET, despite the current 20 to 30 year development horizon. This means that the projects and interventions identified within the UEP have been determined and anchored on the local needs and economic opportunities within the Municipality whilst having the potential to engage with, and leverage, from future industrial and commercial investments, and import/export activities undertaken in the LAPSSET node.

4.5.3 Required infrastructure, including housing

Lamu County, especially Mokowe and Hindi areas, are directly affected from the influx of population which is putting a lot of pressure on existing infrastructure. Among the population migrating to Lamu are skilled/unskilled job seekers, investors, service providers and tourists.

Development of Lamu Port has no doubt put pressure on existing social and physical infrastructure that was largely unprepared for the population influx. The construction of the first three berths have so far seen LAPSSET Port having an average workforce of about 1500. Consequently, housing is one of the sectors that have been significantly impacted due to a mismatch in demand and supply.

The available housing units are mainly in two forms- high end houses for the skilled workers from Kenya Ports Authority, LAPSSET Corridor Development Authority (LCDA), and consultants which totals 20, while the unskilled workers have been provided with 600 semi-contained housing units all within LAPSSET campus. This leaves a housing deficit of about 800, on average. To meet this demand LCDA set aside land to build 400 units through a public private partnership (PPP) and the units are expected to be completed and ready for occupation by end of 2022.

In the meantime, the excess demand is absorbed by neighbouring towns. About 400 workers are accommodated in Hindi town which is approximately 12.5 km from the port, about 250 workers reside in Mokowe which is 17km from the port, and about 150 workers commute from Lamu Island daily. To facilitate commuting workers, KPA provides a bus that drops-off and picks-up port workers from Mokowe jetty every day. The danger of this burgeoning residential housing without guidance of a spatial plan is that it grows in an informal housing settlement and suffers spill-overs of informal economic activities. Consequently, it results into an unattractive environment for business investors. This pattern is very evident in Hindi and Mokowe towns.

Other developments that have appeared in the area include petrol stations, retail shops, supermarkets, and office buildings which are responding to the latent demand created by the population influx.

Affordable housing

A range of housing options targeting low, middle and high-income families should be considered within the proposed residential mixed-use clusters. These should be supported by a range of community facilities located within the various neighbourhoods and linked to the wider parts of the development core, such as the commercial and administrative/ civic zones, as well as public open spaces.

Compact walkable cities with integrated neighbourhoods providing the full range of civic and cultural services, access to education and health facilities, open space and recreation, and commercial / retail opportunities are all engendered in the eco-city principles.

In order to kickstart this process it is proposed that the Municipality pursues the development of affordable housing through the current Government of Kenya Affordable Housing Programme being driven by the State Department for Housing and Urban Development (SDHUD). The current Affordable Housing Programme provides an opportunity to engage in the development of housing and supporting infrastructure which can be the catalyst to accommodating the in-migration of people in order to facilitate population growth and boost economic activity. The introduction of supporting infrastructure through roads, water, power and sanitation will provide further baseline infrastructure provision for additional development and economic opportunities to be leveraged.

At this time, the Municipality should focus on potential development of a range of housing within the Mokowe urban node in order to ensure this particular growth node is developed and managed in a sustainable and resilient manner. In this regard, the UEP encourages the Municipality to pursue an agenda of enabling local landowners within the town to enter into the affordable housing programme through partnerships in coordinating and assisting them with the affordable housing application and permitting procedures.

Risks

Some of the risks that have been documented and were highlighted during stakeholder consultations included:

> Planning and construction of the port have yielded a wide range of concerns and contestations, particularly on land rights, the environment, local livelihoods, and security; > Development of LAPSSET Port has disrupted the livelihoods of about 5000 fishermen. The fishermen claim that dredging of the port area caused fish to migrated to more sheltered areas and into deeper sea which is a challenge to navigate due to the low capacity of the fishing boats that they use; > The completion and operationalization of the port is increasingly attracting people of all types from various parts of the country and beyond. This is likely to be a threat to the socio-economic fabric of the indigenous communities who are known to be conservative Muslims; and