10 MW Waste-to-Energy Transaction and Investment Advisory
K&M was hired by one of the industry’s leading integrated waste technologies solutions provider in the region. The client’s 10 MW Waste to Energy pilot project innovation is a first of its kind in Kenya. The project is based on three specific forms of biomass: municipal solid waste, agricultural crop residues and livestock waste or manure. The WtE pilot which is also phase 1 of the project will be located in Kibera, an informal settlement in Nairobi. This is a single line facility with a capacity of 300 tons per day, and a total of 100,000 tpa. For this pilot phase, the output will be biomethane and electricity. The expanded facility will have a capacity of 250,000 tpa and the outputs will be biomethane, ethanol and electricity. K&M Advisors will provide financial / commercial advisory services with the primary objectives of (i) raising the necessary funds to complete project development and (ii) successfully achieving project financial close for the pilot project.
K&M provided services to the US Trade Development Agency (USTDA) in determining the priority and need for a program to introduce solar water pumps for portable water supply in remote regions of Kenya, and conducted a preliminary feasibility study for potential US solar electric applications. The scope of K&M’s work included the following: review of the Government of Kenya’s goals for infrastructure investment activity, a preliminary analysis of the economics of solar water pumping compared with alternative water delivery technologies, an analysis of the potential for US exports of goods and services, assessment of the export potential for US goods and services, evaluation of the competitive position of the US in terms of being able to provide goods and services for the project, and preparation of the final report.
K&M was engaged by DEG to perform the technical and commercial due diligence of the Eldoret and Lanet power plants, located north and west of Nairobi, and with 55 MW of capacity each. K&M financial and market due diligence assessed the projects’ competitiveness, tariffs, project costs, commercial terms of project agreements, financial model and its assumptions, and insurance provisions. The technical due diligence included: proposed site, technical aspects of project agreements, EPC contract, performance guarantees and liquidated damages, permits and licenses and several other technical characteristics of the projects.
K&M was retained as Lead PPP Transaction Advisor by Kenya’s PPP Unit for a 140 MW geothermal power plant to advise KenGen on designing a bankable PPP transaction. The Olkaria VI power plant is being developed through a PPP arrangement governed by the PPP Act, 2013. The PPP Unit is embedded within the Kenyan National Treasury. KenGen will supply steam to the power plant. The power plant will be developed by a Special Purpose Vehicle (SPV) which will be majority owned by a private sector partner.
K&M’s scope of work included preparing a feasibility study to establish the optimal project commercial model, contract structure, and technical configuration, and confirm the bankability of the Olkaria VI project. K&M’s staff recommended the best Public-Private Partnership (PPP) model, advised KenGen on risk allocation, and prepared all necessary project agreements. K&M has also prepared the request for qualifications and request for proposals and will advise KenGen through the procurement process and proposal evaluation, as well as provide transaction advisory support through to financial close.
Given that this project is being developed under Kenya’s Public Private Partnerships Act, K&M is responsible for ensuring that all documents and processes are compliant with said Act and for supporting KenGen and a special Governmental PPP Unit in obtaining required approvals. During all stages of the assignment, K&M has been responsible for managing a team of advisors which includes AECOM as geothermal technical advisor, international and local counsel, and environmental specialists.
K&M was retained by KenGen to conduct a feasibility study for the Seven Forks 40 MW solar power plant located next to a 225 MW hydroelectric dam in Gitaru, Kenya. K&M’s scope of work includes site studies (topographic and geotechnical), solar resource assessment, conceptual plant designs and interconnection analysis, environmental and social impact assessments, economic and financial viability assessment, financing sources analysis, risk analysis, development of an implementation plant, capacity building, evaluating US based sources of supply for services and suppliers, and drafting the tender documents for the procurement of an engineering, procurement, and construction (EPC) contractor to build the power plant. At the request of KenGen, the feasibility study was possible scaled up to 40 MW. This project included a study tour in Johannesburg, South Africa. The work is funded by a grant provided to KenGen by the United States Trade and Development Agency (USTDA).
K&M was engaged by the Kenya Tea Development Agency (KTDA) to assess the feasibility of small (1 MW) solar PV power plants with battery storage options for thirty tea processing factories across Kenya. K&M’s scope of work includes demand analysis based on hourly load profiles of the tea factories, technical and conceptual designs for solar PV, storage, diesel, and hybrid systems, regulatory analysis, and financial analysis. K&M’s activities included creating and analyzing financial models, including demand assessment based on factory load profiles and analysis of power supply options (solar PV, batteries, diesel, and hybrid), EPC procurement, and regulatory analysis.
Oserian is a Kenyan flower farming company with a total of 20,000 acres. At their site in Naivasha, Oserian owns 5,000 acres of land on which there are proven geothermal resources. They are located directly across from KenGen’s Olkaria fields. They currently have three wells, two power producing wells and one heat producing well. Oserian is home to the largest geothermal heating for agriculture plant in the world and has been named Kenya’s best renewable energy company by the Kenya Association of Manufacturers. Oserian has developed a Master Plan which consists of an industrial park, commercial centers, a game park conservancy and mixed-use housing scheme. Oserian contracted POWER Engineers to perform a technical and economic assessment of Oserian’s planned industrial park. Oserian’s goal for their industrial park is to meet their clients’ energy demands fully with 100% renewables including geothermal, solar, and pumped hydro storage.
As a subcontractor to POWER Engineers, K&M leads the economic assessment. K&M’s cost/benefit analysis includes conducting a payback analysis of the proposed investments under several relevant scenarios. This includes: (i) 100% renewable energy technologies including geothermal, (ii) hybrid green and fossil technology, (iii) hydro pumped storage vs. battery storage, (iv) stages investments and least-cost investment plan, (v) the potential impact of adding additional residential and/or commercial customers, and (vi) regulatory and legal aspects of such potential additions.