East Africa Economic Report

A geothermal Steam Gathering System  The stage is now set for Kenya’s 105MW geothermal electricity generation to take off. The US$108 million at the Menengai geothermal station is now complete, announced Africa Development Bank. The project involved well-drilling and construction of the Steam Gathering System (SGS). The bank, the co-financier of the development phase, says the project met all targets. These include drilling 50 Wells and construction of the steam gathering system.  It drilled 49 Wells producing enough steam to generate 170 MW against the initial target of 150MW. The report says that completion of the phase1 was a drawback to the financial closure of the IPP contract due to conditions attached to the deal.   Among the conditions were; approved PPA contracts and, Proof of Steam Supply Agreement, PISSA. These conditions could not be met before the completion of phase 1 since Menengai geothermal was a greenfield project.   However, the completion of t...

A Geothermal Power plant According to data deciphered from Kengen and Orpower4, Kenya’s leading geothermal power generators, the country has joined the top five largest producers of geothermal power in the world.   The data shows that Kenya’s total geothermal capacity is well past 1000MW, it now stands at 1125 MW.   It is already in the 1GW club!   This upends the the current global ranking which places Kenya at the seventh slot by ThinkGeoEnergy. The firm ranks Kenya number seven with an installed capacity of 861 MW. However, our analysis shows that, the data on which this ranking is based, is outdated.   But the confusion, our survey reveals, is of the generators’ making for they do not regularly update their data. Kengen’s website www.Kengen.co.ke for instance has two sets of data; one says that its installed capacity is 706 MW, and another that lists seven power stations with a total 975 MW capacity. In addition, the data ignores the 150 MW produced by Orp...

   Risks of unbridled capitalism : Air pollution  The COVID -19 pandemic has exposed unbridled capitalism as fragile and myopic. It creates income disparities, low pay for essential workers, discrimination,  false hypotheses, state capture, and fragile economies.  Capitalism has been harshly indicted but no one wants it dead.  Instead. experts call for retooling of brutal capitalism.   “The American form of Capitalism is brutal. With very little public investment and very little Social safety nets” says professor Robert Reich of the University Of California Berkeley. In an interview with CNBC TV. https://www.youtube.com/watch?v=FQswOcLFYWg .   “It transfers wealth from the poor sections of the population to the rich,” said Bernie Sanders, a US Senator. "It is designed to favour the White Anglo-Saxon Protestant race which considers itself superior," argues professor Bill Spriggs of Howard University. https://www.marketplace.org/2020/06/18/for-too-l...

 Instability: Among the results of fragile economies According to the Economist’s broadcast channel, by the end of August 2020, the sovereign debt had hit $258 trillion worldwide. The US borrowed some 3 trillion dollars in the second quarter of this year. Other countries are also on a borrowing binge owing to the public health pandemic CoVID-19, much of it in the second quarter. According to the IMF, emerging markets have so far borrowed some US$125 billion in commercial loans over the same quarter. This has given rise to fears of global debt distress and defaults. Measures enforced to contain the public health crisis caused by COVID19 led to an economic crisis that gave birth to a “debt Pandemic.”       However, there appears to be new thinking about public debt that dispenses with frugality. In fact, some economists disparage frugality as a “Zombie idea” -a bad idea that lacks evidential support but still keeps influencing policy decisions. The former IMF Ch...