K&M Advisors was engaged by the World Bank to develop a comprehensive framework aimed at facilitating private sector participation in Battery Energy Storage Systems (BESS) in Kenya. This study supports the Government of Kenya (GoK) in advancing the country’s evolving energy landscape. With Kenya’s growing reliance on renewable energy sources—particularly geothermal, wind, and solar—the integration of utility-scale, grid-connected BESS is crucial for addressing grid stability, managing excess energy during periods of low demand, and increasing the overall share of renewable energy in the national grid. The intermittent nature of renewable energy sources has introduced challenges such as the need for load balancing and the provision of ancillary services to maintain consistent grid operations.

The primary objectives of this study are to develop a supportive policy, legal, and regulatory framework that encourages private investment in BESS and to assess best practices from other countries to inform Kenya’s strategy. The study involves identifying gaps within Kenya’s existing regulatory framework, exploring viable financing and ownership models, and evaluating the associated risks and mitigation strategies for private sector engagement in BESS projects. Additionally, the study aims to build capacity among government officials and key stakeholders to ensure effective implementation and management of BESS policies and projects.

Through this initiative, the study seeks to establish BESS as an essential element of Kenya’s grid infrastructure, promoting a reliable, sustainable, and flexible power system that aligns with the nation’s green energy goals.

K&M’s scope of work includes conducting a comprehensive review of Kenya’s electricity system, including its policy, legal, and regulatory frameworks related to private sector involvement in BESS. The team will benchmark Kenya’s practices against international standards, identify regulatory gaps, and recommend improvements. K&M will develop a tailored policy, legal, regulatory, and contractual framework to support BESS development and propose effective revenue models, such as payment mechanisms and tariff arrangements, while assessing their financial impacts. Additionally, K&M will perform a detailed risk analysis to evaluate, allocate, and manage risks between the public and private sectors and design appropriate Public-Private Partnership (PPP) contractual structures. To ensure successful implementation, K&M will also deliver targeted capacity-building training for government agencies and stakeholders involved in Kenya’s energy sector.

The objective of this consultancy is to provide technical assistance and support to SEDAPAL in: (i) strengthening its corporate governance system to generate economic, financial, social, and environmental value for the company; (ii) recommending a roadmap with a proposal to improve the company’s corporate governance; (iii) accompanying the SEDAPAL team in charge of the definition of a Business Plan;  and (iv) preparing the financial plan that allows it to achieve the established goals.
In this assignment K&M is responsible for preparing: (i) A financial model with a 15-year projection period for SEDAPAL; and (ii) A financial plan, based on the financial model, with a short (five-year), medium (10-year), and long-term horizon. This financial plan will is the basis for a Business Plan for the company and is dynamic so that it can be used to prepare the Business Plan for the next five years.

SEDAPAL (Servicio de Agua Potable y Alcantarillado de Lima) is the primary water and sewage company responsible for providing and managing water and sanitation services to the Lima metropolitan area. As the city faces significant challenges due to its location in a desert region, rapid urbanization, and the impacts of climate change, SEDAPAL needs to undertake substantial investments to improve and expand its services. SEDAPAL has embarked on a comprehensive plan involving nearly $7 billion in new infrastructure projects to address these challenges. These projects aim to enhance water quality and improve sewage treatment. Additionally, SEDAPAL is focusing on building more reservoirs in the mountains near Lima to capture and store precipitation, a critical step in ensuring a more reliable water supply for the city’s growing population, which is expected to reach 13 million by 2030​​.

The necessity for these investments is underscored by the vulnerability of Lima’s water supply system to climate change. The city relies on three key rivers – the Rimac, Chillon, and Lurin – which are increasingly unable to meet the rising demand for water. The melting of mountain glaciers, which contributes significantly to these rivers’ flow, and the unpredictable impact of climate change on precipitation patterns in the Andes further complicate the situation. The water tariff system is a cornerstone of SEDAPAL’s ability to provide high-quality and sustainable water and sanitation services in Lima, especially in the face of growing demand, infrastructure needs, and the challenges posed by climate change.

In this context, and within the strategic partnership framework between SEDAPAL and IFC, IFC seeks to contract a consultant to identify global best practices for water tariff determination in terms of methodology and inputs and provide a comparative analysis with Lima’s current framework.

The services provided by K&M Advisors were structured into three main tasks:

Task 1 (Work Plan): K&M prepared a comprehensive work plan that detailed each task and activity, the organizational structure of the consultancy, involved parties, and a timeline including milestones and expected outputs.

Task 2 (Comprehensive Assessment of WACC Methodology): Following Peru’s Legislative Decree No. 1620 aimed at reforming water and sanitation services, K&M undertook a detailed study to propose a relevant WACC (Weighted Average Cost of Capital) methodology for SEDAPAL. This involved reviewing the current regulatory frameworks, existing methodologies, and assessing risks associated with SEDAPAL’s operations. A SWOT analysis was conducted to tailor the WACC methodology effectively to the needs and challenges specific to the Peruvian water sector and SEDAPAL’s operations.

Task 3 (Review of Tariff Models): Concurrently, K&M reviewed tariff models by analyzing SEDAPAL’s operational efficiency indicators and the existing tariff model used by SUNASS. This review also included a benchmarking analysis against similar regulatory frameworks globally. The consultant prepared a comprehensive presentation on the findings, which included strategies to address identified weaknesses and optimize tariff models to enhance SEDAPAL’s financial and operational performance.

These tasks were completed in collaboration with IFC and SEDAPAL, ensuring that the consultancy’s recommendations were well-grounded and actionable, tailored to the specific operational realities and regulatory requirements of the water sector in Peru.

The Water and Sewerage Corporation (WSC) engaged K&M to conduct a comprehensive financial analysis regarding the potential takeover of seven desalinated water plants from Aqua Design in The Bahamas. These plants operate under a Build-Own-Operate (BOO) model within a framework defined by a Master Agreement and individual sub-agreements, with three contracts still active, one under extension, and three expired. K&M’s task was to evaluate four distinct options concerning the future ownership and operation of these plants, providing a detailed financial analysis and strategic recommendations to assist WSC in making an informed decision. This involved scrutinizing the operational and financial implications of each option, offering cost estimations, and developing a strategic framework to ensure that WSC’s decisions are financially viable and aligned with governmental directives, thereby facilitating a smooth transition in the management and operation of these vital water resources.

IDB Invest has hired K&M to conduct a comprehensive research project aimed at fostering best practices and uncovering new opportunities in establishing inclusive and sustainable value chains within Port Infrastructure projects across the LAC region. Beginning with an exploration of the construction and operational phases of Ports’ value chains, the initiative will discern the components that incorporate MSMEs and identify prevalent sustainability trends within these chains. K&M will conduct an in-depth analysis of the Ports’ Value Chains, pinpointing the products and services offered at each stage, the complexity, required technical knowledge, certifications, and other pertinent criteria sought by project sponsors. The study also aims to grasp the procurement dynamics, identify key stakeholders, and pinpoint MSME participation levels across the value chain components. Furthermore, the research will emphasize key sustainability trends like decarbonization, climate change adaptation, and fair treatment of employees, among others. To achieve these objectives, K&M will gather information from various sources, conduct interviews with industry stakeholders, generate written reports and visual presentations, and engage in regular discussions with the IDB Invest team.

IDB Invest has engaged K&M to conduct a study on the best practices and opportunities in inclusive and sustainable value chains for Ports Infrastructure projects in the LAC region. The primary focus is to identify components within the value chains during the construction and operation phases of ports, particularly those involving MSMEs, and to assess current sustainability trends.

K&M’s approach starts with a deep analysis of Ports’ Value Chains, covering both construction and operational stages. The study will identify all products and services within the value chain, analyze their sequence, and evaluate criteria such as technical requirements and certifications needed from suppliers. The research will also explore procurement processes to determine the roles of various stakeholders like project sponsors, operators, or third parties.

A key aspect of the study will be to recognize areas of the value chain with significant MSME participation, ranking them based on factors like MSME involvement, product complexity, and supplier capability. Furthermore, K&M will explore prevailing sustainability practices in ports, covering topics such as decarbonization, climate change adaptation, and biodiversity conservation. This will involve comparing current practices across existing LAC ports and considering MSMEs as integral users of the port.

K&M’s research methodology will encompass both primary and secondary data sources, including statistical data, academic literature, and industry studies. They’ll also utilize recent value chain analyses from the IDB Group and gather insights from interviews with industry experts, businesses, and port operators. The findings will be documented in detailed reports and visual presentations, with regular feedback sessions with the IDB Invest team to ensure alignment.

The IADB contracted K&M to be part of a committee that is evaluating SEDAPAL´s performance and recommending key measures for improvement. As part of this work, K&M is evaluating SEDAPAL’s processes and identifying challenges to understand how and to what extent they impact SEDAPAL’s ability to provide quality services to the public. This assessment intends to propose measures to strengthen and modernize the company’s financial management. The scope of the consultancy includes producing an assessment report on SEDAPAL’s current status and a report on proposals for modernization. Key activities involve reviewing financial data, assessing organizational structures, examining strategic plans, and evaluating investment portfolios. The consultancy will also propose guidelines for financial sustainability, organizational efficiency, and potential modifications to the regulatory framework. Additionally, they will suggest alternative financing solutions and engage in coordination meetings with various stakeholders.

The objective of the service contract was to evaluate SEDAPAL’s processes to consistently deliver quality services. The assessment identified challenges and proposed measures for financial management and modernization. The consultancy tasks included producing a report on SEDAPAL’s current status and creating a preliminary document for organizational enhancement.

The consultancy reviewed SEDAPAL’s financial data, analyzed the organizational structure, and assessed strategic plans. K&M evaluated the proposed investment portfolio, focusing on financing sources and borrowing capacity, and proposed solutions for SEDAPAL to be able to implement the investment plan. Benchmarking was conducted to measure SEDAPAL against international standards. K&M also examined tariff structures and the regulatory framework, providing insights into SEDAPAL’s operational and financial direction. Recommendations were made for financial sustainability, organizational improvements, and potential regulatory changes. They also considered alternative financing for investments. The consultancy coordinated with entities like the Technical Secretariat and SEDAPAL during a week of discussions.

The Inter-American Development Bank (IDB) has contracted K&M Advisors LLC (K&M) to support the establishment of CWUIC SP, an insurance company for Caribbean water and sanitation utilities to provide reasonably priced natural disaster insurance, as well as complementary post-disaster operational support and loans for resilient infrastructure investments. K&M supported the IDB Group with the conceptualization and development of CWUIC SP since 2019. Through this assignment, K&M will continue supporting the IDB and other entities related to CWUIC SP with the establishment of and initial operations of CWUIC SP.

Within this assignment, K&M has been assigned a range of responsibilities to support the Caribbean Water Utilities Insurance Company Special Purpose (CWUIC SP) project. These responsibilities include promoting CWUIC SP training and awareness at the Caribbean Water and Wastewater Association (CWWA) conference, facilitating the collection of data essential for CWUIC SP’s risk modeling, providing advisory services to the CWUIC SP Working Group regarding its implementation, and developing a preliminary Financial Model for the capitalization of CWUIC SP. Additionally, K&M is tasked with engaging various stakeholders such as Caribbean water utilities, governmental bodies, insurance brokers, and regulators. They are also responsible for preparing Statements of Work (SOWs) for consultancy services funded by the Foreign, Commonwealth & Development Office (FCDO), structuring Component 3 of CWUIC SP, conducting Component 3 training, and actively supporting the Inter-American Development Bank (IDB) in fundraising efforts for CWUIC SP. These responsibilities collectively contribute to the successful realization of the CWUIC SP project’s objectives.

The Water and Sewerage Corporation (WSC) contracted K&M Advisors to develop an initial Strategic Plan Outline with the objectives and priority actions for WSC for the next four years. The objective of this assignment was to develop an initial Strategic Plan Outline with the objectives and priority actions for the Water and Sewerage Corporation (WSC) for the next four years. Having been validated at a stakeholder workshop that included WSC staff, members of WSC’s board, and authorities from the Ministry of Finance and the Ministry of Public Works, this outline is being used to prepare WSC’s Corporate Business Plan and the associated legal and regulatory reforms required to achieve the objectives established in the plan.

In this assignment, K&M carried out the following activities:

• Conducted a preliminary review of WSC’s coverage, operations, and financial performance
• Proposed objectives and priority actions to WSC Board and WSC EXCOM
• Led a Workshop in Nassau to review proposed objectives and priority actions
• Prepared the Strategy Plan Outline for WSC’s Corporate Business Plan for 2023-2027

The Inter-American Development Bank had contracted a team of firms consisting of K&M, GeothermEx, and POWER Engineers to assess the potential uses of excess geothermal energy in the Eastern Caribbean. The general objective of this consultancy was to assess options for exporting excess geothermal energy in the Eastern Caribbean. The specific objectives of this consultancy were to carry out an infrastructure and investment assessment for green hydrogen production in the Eastern Caribbean based on geothermal energy generation, as well as develop a business model for a green hydrogen network in the region. K&M was responsible for estimating the volume of green hydrogen that could have been produced from excess geothermal power in the Eastern Caribbean, determining the investment needs to produce green hydrogen from geothermal sources, estimating the levelized cost of green hydrogen, and proposing a preliminary business model for a green hydrogen network in the Eastern Caribbean.

The general objective of this consultancy was to prepare the technical, economic, and legal feasibility studies for the introduction of green hydrogen in the energy supply for the domestic market, as well as the supply of an international market from Panama.

In this assignment, K&M was responsible for assessing the potential routes for commercializing green hydrogen from Panama, identifying the role of Panama in the green hydrogen supply chain, developing a methodology for prioritizing capital investments in green hydrogen, and carrying out the economic analysis and risk analysis of developing green hydrogen facilities in Panama.