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Electricity supply from Lamu Power Plant could cost more than originally estimated

Construction of the plant on the Kenyan mainland opposite the tourist island of Lamu was scheduled to begin in 2015

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Kenyan activists reject the governments idea to construct coal-fired Lamu Power Plant

Electricity from a coal-fired power plant to be named Lamu Power Plant due to be built in Kenya by a Kenyan-Chinese consortium will cost consumers up to 10 times more than planned. Construction of the plant on the Kenyan mainland opposite the tourist island of Lamu was scheduled to begin in 2015 but has been repeatedly halted, due in part, to opposition by environmentalists.

Amu Power, a consortium comprising Kenya’s Gulf Energy and Centum Investment and a group of Chinese companies, is due to building the plant after winning the government contract. The Plant’s backers say it will help tackle Kenya’s frequent blackouts by increasing generation capacity by nearly a third and generating power that would cost about half what consumers currently pay.

But opponents say those costs are much higher than projected. Amu Power says electricity from the plant will cost 7.2 U.S. cents per KWh. But that is “highly optimistic,” the U.S.-based Institute for Energy Economics and Financial Analysis said in an independent study, which is the most extensive so far on the plant’s cost. It said the 1000-MW coal-fired plant’s 25-year power purchasing agreement would cost consumers more than $9 billion, even if it does not generate any power.

Activists march in Nairobi, to denounce plans by the Kenyan government to mine coal close to the pristine coastal archipelago of Lamu
Activists march on June 5, 2018 in Nairobi, carrying placards bearing messages to denounce plans by the Kenyan government to mine coal close to the pristine coastal archipelago of Lamu, on World Environment Day. – Kenya is set to build a 981.5 megawatt (MW) coal-fired thermal electricity-generating plant in the Manda Bay area, Lamu County, even as costs of renewable energies are falling dramatically and fuelling a push to phase out coal power generation around the world. (Photo by TONY KARUMBA / AFP)

Related: Kenya’s Lamu Island gets investment ready with infrastructure projects worth $27 billion

“The true costs of Lamu’s electricity during the years 2024 through 2037 could average as high as US 22 to US 75 cents per KWh — three to 10 times the company’s 2014 projection,” the study noted. “We believe Kenya should cancel the project.” The study said the plant’s backers had underpriced coal imports and rising operational and maintenance costs.

Joseph Njoroge, principal secretary at the Ministry of Energy, says the plant was competitive but did not address specific concerns. The plant’s location on the mainland in the coastal Lamu County region is about 14 km from Lamu Island, a famous ancient Swahili settlement and UNESCO World Heritage site and a top tourist destination.

Environmentalists say the plant will pollute the air, destroying mangroves and breeding grounds for five endangered species of marine turtles, fish and other marine life. In 2018, a Kenyan court suspended the project for a second time, sending the dispute back to an environmental tribunal. It is expected to issue a decision later this month on whether the project can go ahead.

Related: To tackle financial crime, Kenya is withdrawing its old 1,000 shilling version

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South Africa’s Foschini to halt Kenya, Ghana operations

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations

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South Africa's Foschini to halt Kenya, Ghana operations
(File photo)

South African fashion retailer, the Foschini Group is considering shutting down its Kenya and Ghana businesses.

The firm’s Chief Executive Officer, Anthony Thunstrom, affirms that at least, six stores will be affected in both countries.

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations that had hit sales.

In July, department store chain, Woolworths pulled out from West Africa for a second time.

The Foschini Group will review economic growth, legislature and lease negotiations in Kenya and Ghana before making its decision.

Come September, in its home market, Thunstrom says The Foschini Group will launch a smaller format Sportscene store that will enjoy entertainment features such as a basketball court and a DJ booth, in an effort to lure millennials into its stores and away from online players such as Naspers’ majority-owned Superbalist.

The store will be launched in September in Johannesburg’s upscale Sandton shopping and financial district.

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Total Mozambique gas project will go on despite insurgency

Total will also acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa

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Energy major Total on Friday said it remained committed to a Mozambique liquefied natural gas project on the country’s northern coast despite deadly Islamist insurgent attacks.

Total will become the operator of the $25 billion Rovuma LNG Project whose construction began on August 5 in the Afungi Peninsula.

The company is also set to acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa, strengthening Total’s position in Africa.

But the area where the project is located has been targeted by jihadists since October 2017, claiming more than 300 lives.

Attackers in February launched an assault on a convoy of vehicles from an Anadarko contractor, killing one worker and injuring others. 

This led to the suspension of operations for a few months, with activities only resuming after the government announced the deployment of armed forces.

Several hundred suspected attackers have been arrested, according to authorities, but sporadic assaults continue.

On Friday Total’s CEO Patrick Pouyanne reaffirmed Total’s commitment to the LNG project saying it “is a unique asset which perfectly fits our strategy and our skills.

“Please be assured of the commitment of Total to bring the best of our human, technical and financial capacities to further strengthen the project execution … in the interests of all those involved, including the government and people of Mozambique,” he said in a statement.

The project is expected to be transformational for Mozambique, creating an estimated 5,000 direct jobs and 45,000 indirect jobs.

The country’s gas deposits are estimated at 5,000 billion cubic metres and would make Mozambique a major exporter of liquefied natural gas.

The use of natural gas is on the rise globally as countries struggle to meet energy demands and shift away from using coal.

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Kenya plans to tax OTT services like Youtube, Netflix

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers

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Kenya plans to tax OTT services like Youtube, Netflix

Kenya’s Information Communication and Technology (ICT) ministry is working on completing a new tax scheme.

This framework, reports say, will be used to tax foreign online streaming media services such as YouTube and Netflix.

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers.

OTT services include all applications that offer voice, video and messaging services over the internet.

Communications Authority Director-General, Francis Wangusi says online content providers exploit the Kenyan industry. Yet, neither the government nor artistes benefit from them.

According to Wangusi, “many countries have policies that guide these services and that is where we are heading as a country”.

He adds that technologies that will facilitate taxation of OTT services are available.

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