Category Archives: LAPSSET

SGR enters the Nairobi National Park

Kenya’s National Land Commission (NLC) has again published a list of land titles it is seeking to acquire on behalf of Kenya Railways for the construction of Phase 2A of the Standard Gauge Railway (SGR) between Nairobi and Naivasha.

The parcels are in the counties of Kiambu, Kajiado, Nakuru, and Narok. Big winners include Kedong Ranch Ltd as they will be compensated for three huge land parcels (measuring 35.7 hectares, 13.01 hectares, and 100.65 hectares) that were previously listed as being belonging from Morning Side Heights,  Ruaraka Housing Estate, and Morningside Heights respectively. Another is Kiambu Western Grazing Area from who the NLC will purchase 146.8 hectares.

Big losers include the Nairobi National Park which is managed by Kenya Wildlife Services (KWS) and which is billed as the only national park within a capital city in the world which will lose loses 41.3 hectares (about 102 acres) which will be hived from land title – L.R. 10758 that was reserved.  The Nairobi National Park was originally 28,950 acres in 1961 when a 999-year lease was granted to Trustees of the Royal Nairobi Parks. Another loser will be Oloolua Forest 17.3 hectares (about 43 acres) to the railway, at a time when Kenyans are concerned about depletion of forests.There have been news reports that construction work for the SGR has commenced in the Nairobi National Park park in the last few weeks.

Construction through the park had been contested for some time, and back in November 2016, a session was held at the Strathmore Business School where Kenya Railways staff met wildlife conservation groups, and concerned residents, to explain issues like the intent of the government, justification for the SGR, land rights, the railway route, land acquisition cost, feasibilities done, stakeholders consultations, impact on wildlife, environmental and community impact etc.

Alternative routes map from Save Nairobi National Park (“SNNP”)

Athanas Maina, MD of Kenya Railways said that it was not possible to follow the corridor of the old (British) railway, which would not be funded and whose terrain was difficult – and that they had considered seven different routes through which the new railway could exit Nairobi to pass through a crucial tunnel at Ngong. They had settled on a “modified savannah” option and the new SGR railway would loop back from the Inland Container Depot at Embakasi, and go over six kilometers of the Nairobi National Park. This would be achieved by constructing elevated bridges in three stages, and running the railway elevated at an average height of eighteen (18) metres over the park with noise defectors and that construction would be completed in 18 months.

The acting Chairman of the Friends of the Nairobi National Park said that if there was a conflict between conservation vs development,  it is because of a lack of planning and consultation, while another representative spoke of continuous assaults on the Nation National Park over the years with demands for the park to cede more land for construction of the Southern bypass highway, oil pipeline, and fibre cables among others.

Maina said that exact route that the railway would follow remained a secret as many people wanted the line to pass on their land to make money – speculating on land at any cost and waiting for the government project to come – and pointed to the LAPSSET projects that had been derailed demands for land compensation. (Elsewhere it has been reported that landowners in the Konza area got Kshs 3 million (~$30,000) per acre of undeveloped land that was acquired for phase one of the SGR). Another resident said that the park’s main threat was  not the SGR, but individuals who were privatizing land, along wildlife corridors, south of the park for housing and quarrying and cited the Jamii Bora development case

Finally, a letter from Richard Leakey, Chairman of the KWS, was read out in which he said that the SGR would have minimal impact on Nairobi National Park, and mainly during the two years of construction. He added that some conservationists had opposed fencing the southern part of the park for many years because wildlife species migrate through there, and if the railway was laid and fenced there, outside the park, it would cut off wildlife from accessing the park. That ended the debate, that day.

Kenya 2018 Budget Policy and the Big Four

Kenya’s National Treasury has published the 2018 budget policy statement  (BPS) – titled “The Big Four” – creating jobs, transforming lives.

It has lots of mentions of the “Big Four” agenda which President Uhuru Kenyatta unveiled in his Jamhuri Day speech (December 12, 2017) which are targets of what his government will aim to achieve in its second term. According to the BPS, the “Big Four” Plan (items are) increasing the share of manufacturing sector to GDP; ensuring all citizens enjoy food security and improved nutrition by 2022; expanding universal health coverage; and delivering at least five hundred thousand (500,000) affordable housing units.

BPS excerpts; 

  • The BPS assumes that GDP will be between 6% to 7% over the next five years, and nominal GDP will rise from Kshs 6.7 trillion ($66 billion) in 2016  to Kshs 14.3 trillion ($139 billion) in 2022.
  • The BPS assumptions are premised on improved collections and efficiencies at Kenya’s 47 developed counties to collect revenues, and for them to have and adhere to realistic budgets. Also, that there be reductions in duplication of roles, resulting in simpler government structure. Counties wages as a percent of their revenue has been 37-38% for the last three years.
  • The BPS cites a goal to double income tax from Kshs 625 billion in 2016-17 to Kshs 1.26 trillion in 2021-22 and mentions that a review of Kenya’s income tax code will be completed by June 2018 to enhance tax compliance and ensure the stability of tax revenue. 
  • The BPS notes that interest payments over the same period will rise from Kshs 271 billion to Kshs 491 billion and wages from Kshs 336 billion to Kshs 563 billion. Elsewhere it projects that wages which were 30% of gross national resource in 2016/17 will progressively reduce in subsequent years down to 23.4% in 2021/22.
  • The BPS cites public-private partnership projects that will be undertaken during the 2018-2020 period such as a second Nyali bridge, Lamu coal plant, Lamu port (3 berths),  Lamu-Garissa-Isiolo highway, airport rehabilitation car parks, conference centers, affordable housing projects, and even a Likoni crossing aerial cable car.
  • There are also 22 energy projects – a mix of geothermal, solar, wind, from which the government commits to purchase energy. These include Lamu coal ($360 million per year) and the Lake Turkana wind (€ 110 million per year).

Some risks noted in the BPS include, counties failing to collect & remit revenue, and the Kenya Deposit Insurance Corporation only covers 9.2% of bank assets (the figure should be closer to international goal of 20% to protect against systemic bank risks). Others are terrorist attacks, natural disasters, climate change, disruptions to mobile money systems, unfunded pension liabilities, and most important the sustainability of public debt.

Oil Pipeline, Economics & Politics Part II: Lamu-Turkana

Yesterday, State House Kenya sent out a statement about plans for a new Kenya oil pipeline from Lokichar in Turkana to Lamu at the Kenya Coast which Total had now committed to build.

The statement comes at a time when Uganda which is believed to have larger oil fields that Kenya has committed to build an oil pipeline through Tanzania, rather than through Kenya. Also for Kenya which had planned to start oil shipments last year in a pilot project using trucks from Turkana to Mombasa, with Tullow, had that plan temporarily stall over infrastructure and political issues.

Blocks sweeten oil pipeline deal.

The Total offer will be sweetened by the provision of some oil blocks in Kenya. Total is in the processor completing an acquisition of Maersk Oil for $7.45 billion and doing the pipeline for Kenya is one way to get local approval for the deal from the local competition authority. 

Following Total SA’s commitment, the Government has consented to a proposed acquisition of the issued and to-be-issued share capital of Maersk Oil Exploration International (Mogas Kenya) in respect of Blocks 10BA, 10BB and 13T. – State House Kenya statement.
Total Kenya is listed on the Nairobi Securities Exchange and Total has been in Kenyan for over sixty years; the company’s operations include eight depots (five of which are solely owned), 2 LPG filling plants and 180 service stations.
The news comes after other oil developments including Total buying out a majority of Tullow’s oil developments in Uganda, leaving Tullow to concentrate on the oil pipeline through Tanzania.

Also see part I of Oil Pipeline, Economics & Politics.

Coal Energy in Kenya

This week, there was a debate on the future of coal in Kenya and its place in the energy mix for the country. It took place at the Strathmore (University) Extractives Industry Centre (SEIC) Nairobi, and was co-hosted by WWF Kenya). The government plans to put up a coal plant on maInland Lamu and a private developer Amu Power was selected to build it, and is seeking approval from the energy regulatory commission to commence construction.


Coal around the world

  • There are 3 new coal plants in Africa, and Japan & Korea will build 60 new ones to replace their old coal & nuclear ones.
  • There are now more global jobs in solar than coal, and solar has gone from 1 GW production in 2003 to 70 GW this year.
  • Trump got votes from Appalachian coal states where jobs were lost. But coal shares are down as gas has replaced coal.
  • With or without Kenya, the world is going green – Ethiopia aims to get to 100% renewable., Germany gets 20% renewable (all in the last 8 years), US has gone from 2 to 7% renewable (in 10 years), South Africa gets 2 GW from solar, and Rwanda’s 8.5MW solar is the largest in the region.


  • No projects happen at Lamu because NGOs on the beach want it to stay marginalized and oppose port, coal, roads etc.
  • Lamu has high unemployment leaving youth exposed to Al-shabab & drugs. This project will have 1,800 jobs for locals.
  • It is not the job of private company to create jobs or improve security in Lamu – that is the government’s role
  • “Save Lamu”  groups oppose the plant because all its side-effects have not been quantified,  and it will destroy far more (fishing) jobs than it creates.

Other Sources and Energy Mix

  • Amu Power’s 1050 MW will add 50% to Kenya’s 2,200 MW electricity from the coal plant that is 20 kilometers from Lamu town.
  • A country’s rate of development depends on availability of cheaper and reliable energy supply. Developed countries get 60% from coal/nuclear and just 3% from renewables on average.
  • Solar is okay for isolated homes, but it will not recover the cost of national power generation and distribution.
  • Geothermal costs $4-5 million per well per well & each one generates 5MW – so how many can Kenya get? It’s very expensive for government & IPP’s who often sink many dry wells
  • Geothermal depends on nature to generate the steam and you can’t tweak the inputs, unlike with coal & nuclear where you can vary the inputs to match demand.
  • Industries need coal. Moyale which gets electricity from Ethiopia hydro only has supply three days a week
  • Even today people on the grid will not turn on electric cookers – the main energy sources in Kenya are charcoal and wood, and they are larger pollutants than coal.
  • Kenya imports all glass because we don’t have the energy to make glass.
  • Coal is Kshs 7.5 per unit compared to kshs 20 from diesel-fired plants.


  • The US has lake signs that “if you fish here, don’t eat the fish” – Kenya will likewise have to monitor coal pollution risks
  • Kenya emissions (excluding extractives) will be 150 MT of carbon by 2030 and the government has committed to reduce this by 30%. How?
  • How will the plant dispose of the ash, carbon dioxide and acid rain? Lamu does not have infrastructure
  • An EIA (environmental impact assessment) audit process in Kenya is a compromised one. They are done by auditors hired by investors and will never oppose projects.
  • Amu Power will use three new clean coal technologies at the plant.
  • The government must check that industry and investors comply with environmental standards – there was a toxic battery factory in Mombasa. County and national governments need to do their own monitoring.
  • Energy projects are financed by lenders have strict conditions.e .g IFC/World Bank finance many thermal plants, and they can’t allow plants that compromise the environment. The Amu power one is guaranteed by the African Development Bank.

Oil Pipeline, Economics & Politics

It’s been reported that the oil pipeline from Uganda is going to go through Tanzania, not Kenya. Two forgotten facts about the Uganda oil decision are that; (1) President Museveni of Uganda has been steadfast that he wanted to refine oil in Uganda, not export raw crude (2) Uganda’s oil has been said to be waxy or heavy. This means it would require complex heating to keep it flowing along a complex oil pipeline through the rift valleys and hills – to the coast of Kenya.

M7 poster 2

The cost, insecurity and difficulty of building infrastructure have been cited reasons that Uganda opted to go through Tanzania. Still Kenya has several LAPSSET projects on the cards including an oil pipeline to go to Lamu where there would be a new highway, railway, coal plant and modern, deep-sea port.

Pipeline Impact

Last year at the TDS Nairobi summit, during the 10th  Ministerial Conference (MC10) of the World Trade Organization (WTO), a session was held on local content in extractive (and oil) industries. Some interesting comments there included:

  • It is a legitimate objective for any resource rich country to try to maximize the value of its resources.
  • If a country puts restrictions on raw exports, it may distort the local economy; it creates artificial demand – and if it is not efficient, local related industries will not survive.
  • Kenya energy expert Patrick Obath suggested that Kenya, Uganda and South Sudan have to talk together and implement projects together for projects like the oil pipeline to be viable. That would also have to happen to get more value-addition from the oil in the countries e.g. can the countries plan to get fertilizer from oil?
  • With mining, you have 20 years of opportunity for local suppliers and jobs, but with an oil pipeline that’s only there in the beginning, then goes away once the pipeline is built (there wont be many local jobs after, and communities don’t get an economic boom from having an oil pipeline passing through their land..which may lead to some local frustration).

More on Kenya Pipeline:

oil tankers

  • The Kenya Pipeline Company is charged with transporting and storing of petroleum products.
  • A (presidential task force on parastatal reforms proposes the Treasury incorporate a holding company known as the Government Investment Corporation (GIC), into which Kenya Pipeline Company should be transferred to determine (its) intended privatization.
  • Meanwhile Kenya Pipeline is continuing with its projects including replacing the current Mombasa-Nairobi Pipeline.