Gulf Power is a special purpose vehicle for the construction and operations of an 80 MW medium speed diesel power plant in Kenya. Gulf Power entered Kenya’s energy market with its $112 million, 80MW, Medium Speed heavy Fuel Oil (HFO) power plant which became operational in December 2014. This commissioning was in the wake of many challenges and opportunities: in what is quickly becoming a crowded sector, Norman Wanyiri and his team have optimized the business for consistent performance well into the future.
Gulf Power received high profile funding to construct its plant from both the International Finance Corporation (IFC) as well as the OPEC Fund for International Development (OFID) which together contributed about $75 million. This is a solid indication that the plant is part of the country’s short and long term Least Cost Power Development Plan and is thus worthy of international funding on this scale.
Wanyiri noted that financial endorsement from the IFC and OFID also brought with it the requirement to adhere to the highest global standards in management practices, as well as environmental and social initiatives which in turn ensured that the plant was built in line with global technological and engineering standards.
The HFO power plant at Athi River near the capital Nairobi is a state of arts project and is the first of its kind, Wanyiri said: “Up until now, Independent Power Producers (IPPs) in Kenya have been dominated by foreign investors. Gulf Power is the first IPP to be fully owned by indigenous local Investors.”
Aside from infrastructure challenges, it is interesting to note that the HFO plant faces competition from other players at this stage. For instance, Wanyiri noted that there had already been several major renewable energy commitments across the country, including the construction and commissioning of 280MW geothermal power plants in the fourth quarter of 2014. Gulf is however confident of higher dispatch factor in the future, since two thirds of Kenya’s population is still without electricity, he said: “We have the potential to grow if required; just by using our current installed infrastructure, we can expand the current capacity by another 40MW by adding additional generating units.”
The HFO plant directly employs 10 professionals, as well as an additional 40 people indirectly through operational and maintenance contract with Wärtsilä Eastern Africa,
Since the plant has only been operational since December last year, training requirements have focused mainly around ensuring that the plant and its staff meet both Kenyan statutory requirements, as well as extra safeguards outlined by the World Bank, Wanyiri said: “At the moment we are conducting statutory training; our employees have been trained on occupational health and safety, first aid and emergency preparedness. We also plan to empower some of our engineers in specialized electrical and mechanical engineering courses in power plants.”
Although the facility only requires a lean team, Gulf Power recognised early on the opportunity to integrate corporate social responsibility into its daily operations. Wanyiri noted that not only did the business have several dedicated social and environmental programmes in place, this was also implemented by a specialist community liaisons officer. He said that the community liaisons officer immediately had his work cut out; he said: “Before and during the construction phase, the local community wanted to know exactly what would happen to their neighborhood and if there would be any adverse effects to the community.”
He added: “Through this liaisons channel that we had established between the business and the community, we were able to assure them that there would be no environmental and social adverse effects.”
Echoing its future-oriented business plan is Gulf Power’s focus on investing in the country’s future leaders and workforce. Wanyiri said: “We plan to provide 2 prefabricated classrooms to one of the schools in the area this year and we may provide more in the future so we can further ease congestion and give the children a better learning environment.” The company also plans to supply educational materials, as well as mentoring future potential leaders. Combining its management team’s experience with solid financial backing, the company is aiming to provide mentoring and scholarships to disadvantaged students.
Wanyiri added: “Some Bright children often may not make it to join the best schools because they cannot afford to pay the required fees, so we are planning to fund several of them through high school and university, while giving them support they need to remain focused through mentoring.” For Gulf Power, social responsibility is not limited to signing a cheque; it understands that its contributions strengthen the communities and the individuals within them, providing many with the opportunity to traverse the limitations of their circumstances.
Furthermore, in order to mitigate its environmental impact, Gulf Power is exploring the option of using solar panels to meet some of the plant’s energy needs; it has also undertaken an extensive tree planting programme around its facility which will lock in carbon for generations to come.
Currently, only about 30 percent of Kenyans have access to electricity and, with the government aiming to double this figure in coming years, Gulf Power’s expansion in the country could not be timelier. Positioning itself in the Kenyan market as a socially and economically responsible energy provider will not only give the provide the company with the diverse revenue base it needs, but also sets it up to grow in capacity as the Kenyan economy develops.