Rwanda receives ALSF’s USD200 million Legal Support

ALSF signed an agreement to provide advisory services support to the government of Rwanda for the negotiation of its deal with Symbion Power.

Rwanda’s Lake Kivu is documented to harbour huge amounts of the poisonous yet useful methane gas estimated at around 55 billion cubic metres.

The naturally occurring methane gas found below the lake is just one of the resources the Rwandan government plans to exploit.

On March 29, 2019, the African Legal Support Facility (ALSF) signed an agreement to provide advisory services support to the government of Rwanda for the negotiation of its deal with Symbion Power.

Powering Rwanda from Lake Kivu

The negotiation with Rwanda is for the development of a USD200 million-dollar energy plant by Lake Kivu.

The energy plant is expected to generate an additional 56 MW of electricity for Rwanda, marking a significant step in Rwanda’s efforts to increase its installed power generation capacity by 291MW to 512MW by 2024.

The plant will extract methane gas from the production area at Lake Kivu and use it to produce electricity.

The Symbion Power project is part of a larger ALSF project providing assistance to Rwanda’s Ministry of Infrastructure (Rwanda MININFRA project), including support for the Nyabarongo II project, which will have a 43.5 MW generation capacity and will increase overall installed capacity by 11.5 per cent.

“The ALSF’s support to Rwanda, through the Rwanda MININFRA project, helps to ensure that Rwandans have access to energy, promoting sustainable development and inclusive growth. The project also ensures that the development occurs on the best possible terms for Rwanda,” said ALSF legal counsel and project task manager, Nchimunya Ndulo.

Rwanda’s USD400 million dangerous methane gas experiment

Seismic and geological surveys on the lake show that the gas could wreak havoc if the pressure of the gases in a lake exceeds the pressure of the water at a given depth.

Lake Kivu’s methane gas has remained untapped for fear over the safety of inhabitants until now.

Already, the US energy firm Contour Global-owned USD200 million KivuWatt is producing 26 MW of electricity for the local grid.

KivuWatt expects to inject another 75 MW in the next phase of its project by deploying nine additional gensets. This will bring the total capacity of electricity to over 100 MW for Rwanda.

Symbion Power is also an American company and the ALSF’s advisory services support will come in handy to ensure that the Rwandese government will not be short-changed as has been happening with many deals negotiated in Africa by international investors.

ALSF and the African Development Bank

The ALSF is an international organisation hosted by the African Development Bank (AfDB) Group.

It is dedicated to funding legal advice and technical assistance to African countries in their negotiation of complex commercial transactions, creditor litigation and other related sovereign transactions.

The ALSF also develops and proposes innovative tools for capacity building and knowledge management.

In March, Uganda ratified the agreement for the establishment of the ALSF becoming the 27th member state of the body.

ALSF is supporting the government to develop the Uganda Refinery Project and the East Africa Crude Oil Pipeline Project.

The ratification of the ALSF Treaty was driven by Uganda’s recognition of the value added by the ALSF’s interventions and by the growing need to further strengthen and improve the country’s legal capacities.

Better negotiated trade deals coming to Africa

In February, ALSF completed a two-day workshop for African lawyers and government negotiators.

The training is aimed at strengthening their capacity to negotiate complex deals involving investments in key economic sectors.

After the training, better-negotiated trade deals could be the way Africa goes cutting out lopsided negotiations which favour foreign investors disadvantaging African governments.

The workshop, co-organized with the African Business Law Firms Association (ABFLA) under the African Legal Support Facility Academy, was held in Accra, Ghana.

AfDB which prides itself as Africa’s premier development finance institution is on the ground in 44 African countries.

It contributes to the economic development and the social progress of its 54 regional member states.

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Acumen launches $70 million solar fund KawiSafi ventures

Acumen announces nearly $70 Million close of for-profit off-grid energy fund through its subsidiary Acumen Capital Partners

Acumen, the nonprofit that invests philanthropic capital in companies and leaders tackling poverty, today announced the approximately $70 million close of for-profit fund, KawiSafi Ventures, through Acumen Capital Partners. After investing $22 million of patient, philanthropic capital across the off-grid ecosystem and impacting 81 million lives, Acumen saw an opportunity to drive energy access for millions of low-income people in East Africa and scale the clean energy sector.

In sub-Saharan Africa, more than 600 million people currently live without electricity and spend $17 billion a year on dirty, inefficient energy. KawiSafi aims to deliver clean, affordable energy to 10 million people, at least half of whom live in poverty, and displace more than one million tons of carbon dioxide in the next 10 years, to address energy poverty and help avert the current climate crisis. To date, KawiSafi has invested $21 million to impact 4.3 million people and avert 360 thousand tons of carbon dioxide emissions.

Read also: Renewable energy attracts IFC loan for Equity Bank

“Acumen’s investing experience has shown us that Africa has a unique opportunity to solve its energy problem,” said Jacqueline Novogratz, Founder and CEO of Acumen. “We created KawiSafi to prove that renewable, off-grid energy can be a faster, cheaper and cleaner way to electrify the continent. By building scalable solutions that can bring power to low-income communities that have lived without electricity for too long, we can create a seismic shift in off-grid energy, releasing immense levels of human productivity and minimizing impact on the environment. Given that Africa’s population is expected to nearly double by 2030, a clean energy strategy is good not just for the continent but for everyone.”

KawiSafi has raised approximately $70 million to catalyze companies that deliver clean, affordable renewable energy to low-income consumers and businesses quickly climbing the energy ladder. The fund maintains Acumen’s values and impact-focused approach to investing but aims to deliver market-competitive returns by making larger, more significant investments in high-growth companies with proven business models. Some of KawiSafi’s early supporters include anchor investor the Green Climate Fund along with Steve Jurvetson, Chris Anderson and the Skoll Foundation. Acumen, as sponsor, holds an equity interest in the fund.

“The energy landscape has changed drastically in the last decade, and we have seen proven, profitable businesses emerge that are already transforming how low-income people access electricity,” said KawiSafi’s Managing Director Amar Inamdar. “These companies need early-growth capital to scale so they meet customer demand and drive innovation in a rapidly evolving ecosystem. KawiSafi will fill critical market gaps to create a sustainable, off-grid ecosystem, supporting countries to realize their UN Sustainable Development Goal of universal energy access.”

Read also: Swede agency invests $20 million towards renewable energy in Rwanda

d.light, a longtime Acumen investee, is one of KawiSafi’s first investments. The company, which manufactures and distributes a broad range of high-quality, affordable solar products, has impacted more than 90 million lives and offset 21 million tons of CO2. d.light recently closed $41 million in Series E financing, demonstrating how KawiSafi can help accelerate growth for companies with proven business models poised to generate significant financial and social returns.

KawiSafi is managed by Acumen Capital Partners LLC, an Acumen-owned subsidiary that structures and manages funds investing in social enterprises poised to scale to transform the lives of low-income people everywhere and solve some of poverty’s greatest challenges. Acumen Capital Partners leverages Acumen’s nearly 20 years of investing in the world’s toughest, most underdeveloped markets to address critical capital gaps for social enterprises on their journey to scale.

GCF Executive Director ad interim Javier Manzanares said KawiSafi Ventures has great potential in its ability to act as a role model for similar renewable energy investments in other countries.

“While the establishment of off-grid solar power will initially target at least 10 million energy-scarce people in Rwanda and Kenya, this fund has elements which could be replicated in bringing universal, low-emission power to communities elsewhere,” Manzanares said. “A key benefit of KawiSafi Ventures is the way it empowers solar power entrepreneurs at the grassroots level to leapfrog the need for fossil fuels in lighting up people’s lives.”

Read also how Green Mini-Grid Programme to light 3 DRC cities

How East African businesses are going to lead the AFCTA

The apex body for East Africa’s businesses, East African Business Council has urged regional CEOs to opportunities arising from the EAC regional integration process.

This takes place even as the council in collaboration with TradeMark East Africa (TMEA) launched the regional programme on Public-Private Sector Dialogue (PPD) for Trade and Investment from 2019 to 2023.

According to EABC Chief Executive Mr Peter Mathuki said “The project aims to enhance advocacy and dialogue on transport and logistics, trade facilitation, customs & tax, standards, and NTBs at regional and country level. In addition, the programme extends beyond the EAC and incorporates the COMESA, COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) and  Africa Continental Free Trade Area (AfCFTA).”

“Public-Private Dialogue can facilitate the trade & investment climate reforms by promoting better diagnosis of investment climate problems, transparency and inclusive design of policy reforms making policies easier to implement. TMEA launched this new partnership with EABC to galvanize and facilitate trade and investments in the EAC,” said Mr. Allan Ngugi, Ag. Director Private Sector Advocacy TMEA.

For businesses in the region to grow and expand within and beyond the EA, there is a need for technical and financial support to EABC in a bid to advocate and input substantive issues affecting the business community in regard to policy formulation and implementation in the region.

According to Mr Mathuki businesses should proactively engage the East African Community through EABC given the proximity advantage that the EAC and EABC Secretariat are located in Arusha. He noted there is a need to remove Non-Tariff Barriers and embark on trading proactively with the neighboring countries even before venturing outside the continent.

“Let’s spur business within ourselves as the EAC bloc,” said Mr Mathuki.

According to the CEO, EABC is keen to enhance dialogue and partnership between the private and public sector; hence EABC will spearhead the programme in close collaboration with the all national and regional sectoral private sector associations in the EAC.

Speaking at the recently concluded CEO Round Table Meeting Mr. Charles Omusana from the EAC Secretariat informed the CEOs on initiatives and programmes that support businesses growth and Investment the EAC Secretariat is working on such as the review of the EAC CET.

He noted, “It is the right of the private sector to demand a better and improved business climate in the region.” He further urged the CEOs to give input on the EAC Private Sector Development Strategy that will be developed.

The Chairman of Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) Arusha Mr. Walter Maeda welcomed closer collaboration between TCCIA and the East African Business Council in a bid to support SMEs to take advantage of the opportunities availed by the  EAC regional integration process.

“Request for waiver of duty from the Import Commissioner for EAC Originating Goods takes 7 days, this delays business and intra EAC Trade” Mr. Amani Temu  from Taha Fresh elaborated one of the obstacles to cross border trade. Among other issues, affecting businesses is the recent notice on no conditional release for imported goods by the Tanzania Bureau of Standards, which subjects imported goods from the EAC Partner States to inspections causing delay.

The steel industry in Arusha is calling for the review of East African Harmonized Standards on hot-rolled steel plates of less than 1mm as the plates are an important raw material for their industries.

“Mutual Recognition of Standards is important to businesses, such protectionist administrative measures are NTBs which hinder intra EAC trade, “ said Hon Mathuki

The CEO Forum in Arusha also agreed to consolidate issues affecting businesses at the ground and through the support of EABC they are keen to engage the EAC Secretary General and Council of Minister for a quick resolution.

This comes at an opportune time when the EAC integration process is marking 20 years in November 2019  since the signing of the Treaty, it is important that the private sector and government dialogue and ensure that protocols and policies work on the ground for EAC businesses. In addition, Article 7 of the Treaty for the Establishment of the EAC states on people-centered and market-driven cooperation as a principle to govern practical achievements of the objectives of the EAC integration process. Further Article 128 emphasizes on strengthening of the private sector as a key partner in the EAC integration.

“Barriers to trading across borders such as multiple product standard inspections, bureaucratic trade procedures delays business transactions and increase the cost of doing business. EABC will evaluate and monitor EAC policies to ensure they work for businesses at the ground level and create momentum for accelerating the policy reforms related to business and investment climate in the EAC ” said Mr Mathuki.

The programme seeks to contribute to the reduction of transport (road, rail, and air) cost and time along transport corridors by 10 per cent and increase the efficiency of logistic services. Furthermore, it will increase the export capacity of East African businesses and enhance customs and other trade-related agencies efficiency by reducing time to process trade documentation.

It will enhance dialogue on customs matters such as tariffs, taxes, levies, Common External Tariffs, and import/export tax incentives. It will also look at Harmonization of East African Standards, counterfeit and sub-standard issues as well as Non-Tariff Barriers,” said Mr Mathuki.

“The operationalization of the Single Customs Territory has contributed to the reduction of delays in cargo clearance in the Northern Corridor, the turnaround time of goods transiting from Mombasa to Kampala has been reduced from 18 days to 4, and goods from Mombasa to Kigali, from 21 days to 6.2, “ said Mr Mathuki.

According to the World Trade Organization to the Central Corridor turnaround time between the port of Dar es Salaam and Kigali (or Bujumbura) has been reduced from over 20 days to 6.

WorldBank’s Ease of Doing Business report (2018), EAC is ranked at 149 out of 190 in the ease of trading across borders.  In the region, the time it takes to export is at an average of 76.hrs which is too high compared to 12.5 hours in OECD High-Income Economies. The cost to export outside the region is at an average of USD427.8 compared to 139.1 in OECD High-Income economies.

The export documentary compliance in the region takes 80.2hours and cost USD 170.2 while in OECD High-Income economies is at 2.4hrs and USD35.2 respectively.

TMEA will continue to play a critical role in facilitating ease of doing business in the region and the continent.

 

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