Del Monte Celebrates 60 Years in Kenya

Del Monte Kenya exports over $80 million worth of products annually, one of the most important sources of foreign exchange in the agricultural sector. Since 2004, it has contributed Kshs 100 billion, equivalent to 0.16% of GDP, while purchasing Kshs 850 million from SMEs annually. It also supports three Saccos with assets of Kshs 2.53 billion and manages Kshs 2.75 billion in pension assets for its permanent staff and casual workers.

These are some of the findings in a new publication on Del Monte Kenya’s 60-Year Impact Report done by Lotus Consulting. While most of the writing covers the last two decades of available data (2004-2024), it also goes into its history of sustainable agribusiness practices and impacts as the company navigated through changes in export markets, ownership, governments, and community needs, human rights challenges, and land uses.

The California Packing Corporation (known as Calpak) took over Kenya Canners, whose plant could process 15,000 tons per year but which by 1963 had ceased pineapple exports. This was the first major investment by an American corporation in Kenya's agriculture sector and the agreement was signed by Finance Minister James Gichuru, Planning & Development Minister Tom Mboya and the Agriculture Minister, Bruce McKenzie, for the Government of Kenya.

Calpak undertook to furnish Kenya Canners with financial, technical research and marketing assistance to expand from 20,000 tons of pineapple per annum to 35,000 tons within 3 years from 1965, offer export outlets under Del Monte trademarks to a worldwide market and to train other Kenyan farmers (outgrowers) to grow pineapple. The Kenya Government undertook to purchase 20,000 acres of arable agricultural land and to lease it to Calpak for 49 years from 1965, renewable for another 49 years. Soon after Calpak became Del Monte Corporation to reflect the prominence of its leading brand.

In 1968, Del Monte exercised an option in the original agreement and bought a majority shareholding in Kenya Canners. It then embarked on a major pineapple expansion program comprising the construction of a new factory complex along with acquisition of more suitable pineapple-growing land, and Kenya Canners became Del Monte's second largest exporter of canned pineapple.

Meanwhile, its parent Del Monte was purchased by tobacco manufacturer R. J. Reynolds Industries in 1979, which later, after another deal, became RJR Nabisco. Its two main food firms were Nabisco Biscuits and Del Monte, which together accounted for 60% of its sales, but its management felt that the tobacco business weighed down its share price, which would have been buoyed by its food brands.

After Kohlberg Kravis Roberts & Co. (KKR) acquired RJR Nabisco in a 1989 leveraged buyout (LBO), the food companies were sold for $5 billion to pay down the debt. Del Monte was split into three divisions that were sold separately. Over the next decade, ownership of the international operations, which included Del Monte in Kenya, was traded between the UK (Polly Peck, 1989), South Africa (Royal Foods, 1992), and Italy (Cirio, 2002). Elsewhere, Fresh Del Monte was acquired in 1996 by the IAT Group. In 2004, Fresh Del Monte bought the Del Monte Foods units of Cirio for $340 million after the latter was declared insolvent. These include operations in Europe, Africa, and the Middle East.

Then in 2026, Fresh Del Monte acquired the assets of the Del Monte Corporation from bankruptcy court, reuniting the legendary food label under a single group for the first time in four decades. With that, Fresh Del Monte has moved to rename itself the Del Monte Corporation and change its NYSE-ticker listing from "FDP" to "DEL".

What do the next few decades look like for Del Monte Kenya, a wholly owned subsidiary of Fresh Del Monte Produce, and which was hailed by President William Ruto in 2023 as the largest private sector employer in Kenya? 

While it runs one of the world's biggest commercial plantations, able to produce 200,000 tons of fresh pineapple every year, it will be one of its diversified products. Alongside pineapple, which is sold as juices and exported as fresh, canned, or frozen, it has started growing mangoes and avocados to develop high-quality products for local markets and for export. Also, canned beverages and energy drinks will be added as consumer tastes are changing. They will revive an outgrower model in a modern scheme to source from independent farmers, unlike the one that did not work in past decades (1948-1965), but now with new knowledge. And of course, the future includes adding on drones and AI to improve production efficiencies.

The Base Titanium Legacy in Kenya

A flagship mining project ends as interest in the sector takes off.

After twelve years of operations, Base Titanium’s Kwale Mineral Sands operation has quietly closed, marking the end of Kenya’s largest mining project to date. What began in 2013 and later became a Kenya Vision 2030 mining flagship, concluded in February 2025 with a final bulk shipment, leaving behind important lessons about responsible mining, community relations, and the challenges of developing Kenya’s mineral sector.

Base Resources invested Kshs 26 billion in the project, with 9 billion spent on local procurement. Over twelve years, they extracted 5.2 million tons of minerals while paying approximately Kshs 11 billion in royalties, substantial revenue for a sector Kenya is still learning to develop. Between 2019 and 2022, Base Titanium accounted for 85% of Kenya’s mineral sector revenue, contributing 28.2 billion shillings of the total 35.2 billion in 2022. This dominance highlighted both the operation’s success and the underdevelopment of Kenya’s broader mining sector.

The company maintained unusual transparency, publishing detailed payment tallies on its website of payments to the Kenyan government, including value-added tax, utilities, and royalties. The company documented not only what it paid to the government but also the expected allocations to be advanced to the county government and local communities, maintaining transparency even as lawsuits emerged regarding the distribution of these funds. This openness set a standard other extractive companies should follow.

The challenges it faced over the decade included disputes over royalty rates that took years to resolve, dozens of court cases that overlapped, delayed VAT refunds, and a three-year exploration moratorium from November 2019 that prevented finding new deposits, even in adjacent counties, to extend operations. Also, major value-addition side investments did not sprout from the project.

With its exit, it leaves behind infrastructure and the company has handed over the 8.4 million cubic meter Mukurumudzi Dam to serve Kwale and the Coast area, power substations and a 16-kilometre transmission line, an 8-kilometre tarmac road, and buildings that can now be used as training centres. It built a ship-loading facility at the Likoni dock on land leased from Kenya Ferry Services, which is now part of the Kenya Ports Authority. The company had development agreements with Likoni, Msambweni, and Mrima Bwiti communities and funded projects in livelihoods, agriculture, education, and health. The company employed local workers and used local suppliers to send 50 trucks daily between the factory in Msambweni and the Likoni dock.

The rehabilitation work is ongoing to transform 2,500 hectares of brown dunes back to green vegetation, by pouring back topsoil, tree planting, grass cover, and compacting. It is hoped to restore the land to be fit for agricultural or forest or other uses. Interestingly, eucalyptus trees, normally dreaded in Kenya for their groundwater-absorbing ability, have been deliberately replanted in parts of the site precisely for that purpose - to help absorb water and stabilize the reclaimed land. A Post-Mining Land Use Committee with government, county, NEMA, and community representatives ensures accountability in the restoration process. While the land needs years to be fully usable, this careful rehabilitation sets a precedent for future mining operations.

Base Titanium proved that mining companies can operate profitably in Kenya while respecting communities and environmental standards. The operation wasn’t perfect; royalty rates could have been higher, and communities are still saying they have not received royalties or are seeking compensation for the use of their land that the government leased to the company.

But compared to other extractive operations, its payments transparency, infrastructure contributions, and environmental restoration represent genuine progress. As Kenya develops its mineral sector, this operation provides a foundation to build on that future mining ventures can learn from, not just lessons about what to avoid. The lessons include leasing rather than buying land, engaging local communities, and employing local people rather than relying primarily on expatriate managers.

Also, when capital-intensive mining ventures are approached with promises of billions or trillions without realistic planning and genuine partnership, they are doomed to fail. This approach proved particularly important in remote areas where development has been limited and where NGOs sometimes politicize projects, creating obstacles for investors.

In January 2025, American firm Energy Fuels bought Base Resources for Kshs 31.8 billion, closing the chapter on Kenya’s largest mining project. They hope to recreate the Base investment experience in Madagascar, where they plan to mine heavy mineral sands in a project called Vara Mada for 38 years.

The Kenya government still needs the Base story to attract new investors, and it features members of the Energy team on summit panels that target international mining and investments.

In March 2026, Kenya invited mining firms with the necessary financing and experience to tender and undertake the exploration of copper in Tharaka Nithi, manganese in Tana River, coltan in Embu, chromite in Samburu, and niobium and other rare earths in Kwale. On to a new chapter of mining.

How 30% Kenyan Shareholding of Foreign Companies was Conceived

For the last few weeks there's been talk about the 30% rule. Yesterday the CS for Industrialization said it was a mistake, and the team at Anjarwalla & Khanna said they heard that it had been introduced late in the process and that they flagged it and written immediately to the Attorney General on it. 

Anjawalla & Khanna briefing

But how did it come about? The talk was that it was introduced late in the third reading of amendments to the Companies Bill which was a voluminous bill - almost 800 pages and with 1,000 clauses - that was discussed in parliamentary sessions over a period of 5 days.

The Hansard of one session (from Mzalendo) shows that the clause that specified that foreign companies should demonstrates that at least thirty per cent of the company’s shareholding is held by Kenyan citizens by birth may have been introduced by Wesley Korir, the MP for Cherangany - and this led to a long debate late in the evening for parliament (the sitting time had been extended).

It was supported by some MP's and opposed by others including: 

For the amendment

• Nicholas Gumbo:  If you go to some neighbouring countries in East Africa, you cannot be allowed to register a company unless you give 50% to locals. Why should we be apologetic about this?
• James Nyikal: The reason is that as Kenya is growing richer, the majority of Kenyans are getting poorer.. The reason is basically that a lot of the wealth we have is actually owned by foreigners and a few people who pretend to be businessmen but are basically agents for principals who are abroad. In South Africa, immediately after their independence, there was serious effort and companies had even to give shares to local people, so that ownership became local. So, 30% is acceptable and we should support it for the sake of Kenyans.
• Sammy Mwaita:  I support because I remember when we were discussing the Public Procurement and Disposal Bill in this House, we pegged the local content at 40% , so that citizens may benefit from business. This is timely. We should initiate it from the time of registration. This is a very good move. 
• Robert Pukose: I support this amendment of 30%. This is because when you compare us with our neighbouring countries--- In Tanzania and Ethiopia it is 50%. Ethiopia makes it very positive because companies are not allowed to employ a foreigner who has qualifications which local people have. So, we should accept this 30%. 

Against the Amendment

Hansard page from Mzalendo

• (Senator) Gideon Moi: ..Number two is the fact that imposing 30% local shareholding on any foreign company is very extreme. People who want to put their money in a venture are going to be extremely wary of just picking on any shareholder. If I were to support the Member, the local shareholding would be less than 30% or none at all.
• James Oyoo: When Kenya attained Independence, it was a prerequisite for any company to give shares to local Kenyans. The immense greed of Kenyans made us reduce it to 10% (when it) started going to individuals’ pockets. It is a good idea but it is ill conceived.
• Aden Duale: The history of Mobitelea and Safaricom is very clear. Some brokers would sit somewhere and this meant we would increase brokers on the streets.. We will make Kenyans who are brokers in the village to say that if you cannot give them 30%, you will not do business. That is not what happens in most--- President Obama says, “Take Kenya where South Korea has reached.” That law does not exist in South Korea and Malaysia...You must allow engineers to have companies but you will have people who have not gone to school. 
• Samuel Chepkonga: .. I was a regulator at the Communications Commission of Kenya (CCK). We provided a policy in which we said that for you to invest in the telecommunication sector you had to have a Kenyan partner with 30%..They kept amending the policy in the telecommunication sector to where it is now; there is 0% requirement for a Kenyan to invest in the telecommunication sector..Let me tell you Members, foreign direct investment comes in huge amounts such as US$500 million. Which Kenyan will produce US$150 million? Let us be serious. Secondly, we are a very poor country. We are seeking to attract foreign direct investment. You are now telling those companies which are seeking to invest in Kenya that this is not an attractive destination. This law is seeking to encourage and make Kenya a friendly investment country. If you are going to bring things such as these, you are going to chase direct foreign investment out of this country.

Kenya Companies Act 2015

This morning, a session was held by the law firm of  Anjarwalla & Khanna in Nairobi to advise stakeholders abount the new Companies Act and Insolvency Act that are now law. 

The Cabinet Secretary for Industrialisation, Adan Mohamed, said that the day when President Uhuru Kenyatta signed 4 bills into law - the companies act, insolvency act, special economic zones act and business registration act - was his proudest day in two years in the Cabinet.

Partners at the law firm explained various sections of the new companies act including: 

• It makes businesses easy to register and operate - and one person can form a company. 
• Memo (can be one page long) & articles are simpler 
• Role of the company secretary has been clarified. Corporate governance has been clarified with penalties for directors and management including for conflict of interest.
• 30% local shareholding in a foreign company. Adan said this was a mistake that the government would rectify. The team from Anjarwalla & Khanna said that while the 30% rule  is probably constitutional it's impractical, and the AG & government agree. They also explained that it is for new branches only - and does not apply to existing branches, or to any subsidiaries of foreign companies
• It gives minority shareholders court powers if main shareholder/management are prejudicial or make bad decisions / transactions on behalf of the company
• New company is able to do anything including borrow unless if it restricted
• PE Investor oversight: Investors can attend board meetings as observers  and  without being directors or  legally bound by decisions
• A company must have at least one natural person as a director (all companies have 6 months to rectify this)
• Companies can buy back shares from other shareholders
• Kshs. 6.75 million (~$67,500) is the minimum paid-up share capital for a public company (this will affect some land owning companies and large property developers)
• Public companies need to know who beneficially owns their shares (the true owners behind proxies)
• Companies are required to have websites and to publish financial statements online
• Share buy backs are now allowed. 
• All shareholders have rights to preemption when companies create new shares - (and this can only be from profits, not new money)
• MBO and LBO:'s banks could not finance acquisitions, but now they can. e.g. Management can to a  bank and use the assets of the company secure financing to buy it or pay off foreign outgoing shareholders - (this opens another exit opportunity for investors)

Adan also said that the insolvency law, which previously was aimed on recoveries for secured creditors, is now focused on bringing insolvent companies back to life.

FastJet Finally Get Kenya License

The three year journey to get low-cost airline FastJet into Nairobi now seems to be nearer to it's goal following the licensing of FastJet Kenya to operate domestic air services between Nairobi and Mombasa, Kisumu, Eldoret, and Wajir. 

However they were not granted other rights they had applied for to fly from Nairobi to  international destinations including Lusaka Harare Lilongwe and Entebbe that they serve from their current bas in Dar es Salaam, Tanzania. 

Still it's a start. In the three years since they were established JamboJet (one by Kenya Airways) has established itself as a reliable true low cost carrier in the country, while one of the main local airlines Jetlink has since gone out of business, leaving Fly540/Fly-SAX as the only other domestic airline with regular services to the main airports around the county. JamboJet also have designs on flying to neighboring countries, but an approval discussion was deferred in their case.  

Lady Lori & FastJet?

The latest round of airline license applications has a curious addition with Lady Lori previously known as a successful helicopter charter company applying for a variation of their current license.

Lady Lori are seeking to introduce domestic flights between Nairobi and Mombasa as well as to obtain rights for international routes from Nairobi to Dar es Salaam, Juba, Kigali, Entebbe, Maputo and Lusaka.

Across the border is successful FastJet who have not been shy about their ambitions for Kenya. But their license to operate which they intended to obtain via an investment in Kenya's Fly540 airline has been stuck somewhere in the government red tape while their Tanzania business has thrived and they are now the leading airline there. Recently, FastJet came to a settlement with Fly540 ending their acrimonious relationship. 

Could Fastjet now be starting afresh with an established and licensed operator? Lady Lori is applying for the above routes with the intention to fly Airbus A320 aircraft - which happen to be the only aircraft flown by FastJet.

FastJet, as a low cost operator has made the A320 the only airline in it's fleet and one that made a few people wondered how Fly540 with a mix of ATRs and Bombardiers would integrate.  Lady Lori offers a fresh start in this regard.

Centonomy: Making Smart Sense of your Finances

Some days ago, Waceke Nduati, founder of Centonomy, a personal finance series that helps people get a grip of their finances and deal with money problems (that are often self-inflicted), gave a brief talk ahead of the new Centomy class period.

Centomy's eleven week course has just resumed with classes (total 3 hours a week) repeated on Tuesday,Wednesday,Thursday and Saturday from June to August. This is useful as some people may be busy on some days in a week, but can catch a repeat  on any of the other days, and they are both in Westlands and downtown Nairobi.  

These include sessions on personal money management (setting goals, monitoring plans), living abundantly, investment planning (choosing an advisor,  stock exchanges, valuing private companies), psychology of spending, money & relationships, time value of money, good vs. bad debt, managing cash reserves and irregular incomes, property investing, taxes, and estate planning (wills, family companies, succession).

Some tips she cited: 

• If you want to grow wealth, don’t hang with people who just sit around and complain about things like government. Instead read, learn, and be with uplifting voices.
• Use your free time. Do free lance stuff like writing on Saturday morning or drive around to check up on opportunities. e.g new houses
• If you buy a Range Rover for attention, you may be doing it at the wrong time in your life. Also you'll have to keep upgrading that car to keep impressing the same people.
• The skills you have are assets; improve them, instead of buying the latest phone (the world will never run out of things to spend money on)
• Realise that half your income in a year goes to taxes and rent. Also we earn money 5 days a week but spend 7 days a week.
• When you retire, whatever your built will have to go back to paying your lifestyle
• Hidden savings - cutting back on your Kshs 300 per day lunch may equal Kshs 108,000 in December - enough for a land down payment, school fees or a (well deserved) holiday. 
• It's  a myth that you can only save/invest when you earn a lot. Start with whatever you have, and saving Kshs 200 a day at 10 % can be Kshs 1.2 million in 10 years.

BritAm and Swala Investments

Last week saw the announcement of two new regional investment opportunities – one a new bond offer in Kenya and the other – an IPO in Tanzania – that both close on July 4.

BritAm Bond: Kenyan financial group Britam announced a Kshs 6 billion ($69 million) bond  which will be two tranches starting with an initial target of Kshs 3 billion.

Some excerpts from the bond prospectus 

• There is green shoe option of Kshs 1 billion in the first tranche.
• Funds raised will be utilized in private equity, ICT development and local and regional expansion projects.
• The minimum investment is Kshs 100,000 (~$1,150) with multiples after of Kshs 50,000.
• The 5 year bond (maturing in July 2019) pays 13% a year (6.5% every six months). So if you invest Kshs 100,000, you will get an interest  payment of ($) Kshs. 6,500 twice a year.
• The bonds will be listed at the NSE for easy trading.
• At the end of 2013 BritAm had Kshs 47 billion of assets, revenue of Kshs 15 billion and pre tax profit of Kshs 3.1b. They had Kshs 3.7 billion in investment property and Kshs 6.1 billion in listed companies. They own 21% of Housing Finance, 10% of Equity Bank and 25% of Acorn group. They are acquiring Real Insurance for Kshs 1.3 billion (825m cash and shares  for the balance).
• The bond issuance will cost Kshs 57m shillings - and Dyer & Blair get about Kshs 36M of this as the arranger gets (27M) and for the Placement (9M).

Swala Energy: Swala Oil & Gas (Tanzania) aim to raise between TZS 1.6 billion ($969,000) if they sells 3.2 billion shares and TZS4.8b ($4.8 million) if they sell 9.6 billion shares at TZS 500 each. The Offer is conditional on the Company achieving a minimum subscription of 3,200,000 Shares under this Prospectus, to raise TZS 1,600,000,000 (before expenses of the Offer). The Company may decide not to allot any shares and repay all application monies or seek a no objection to proceed with the allotment, in case the minimum subscription is not attained.

• The minimum subscription is TZS 50,000 ($30) for 100 Shares. You can apply online, but a physical application form must be received at the brokers by 4^th July.
• Swala has total assets of $1.8 million in 2013 (up from $75,000 in 2012) . revenue in 2013 was $285,000 (up from $62k)  and loss was $5.5 million for the year (down from $1.26m the year before).

• They are fundraising as they plan to spend $3.5M next year and $6M the year after.
• A London broker values the company at $52.3 million based on 50% interest in Pangani (an area of 8578 sq. km worth $25.1m) and 50% in Kilosa Kilombero (an area of 8838 sq. km worth $36.3m). Otto Energy is a 50% partner in both of these ventures. 
• The Costs of filing will be between TZS 210M and TZS 248M ($150,000) with printing costing 32M, accountants 40m (~25,000 to BDO), technical specialist (Risc Pty) 40M legal (Asyla) 16m, nominated advisors 27M (~$16,000 to Arch Financial if $3m is raised) and the Dar es Salaam Exchange gets 27M.
• The Swala Energy prospectus gives insights on Kenya oil deals that are rarely public and which are used as a basis for valuation of these shares and for comparison as they are all in the East Africa Rift System E.g. Recent Kenya transactions (EARS ) include Marathon Oil bought aBlock 12A license from Africa Oil for $78.5M and a Block 9 license, Africa Oil bought a  Block 12A license from Tullow for $3.86M ($1,265 per sq. KM and Adamantine sold a Block 11B license to Bowleven for $10M ($1,429 per sq. KM).
• In Tanzania, profits from oil are shared out as 45% government and 55% to the contractor when production is less than 12,500 barrels per day and when barrels are over 100,000 per day, the government gets 70% and the contractor 30%.
• Swala has applied for approval to list on the Enterprise growth Market section of the Dar es Salaam stock exchange (they need 100 shareholders so list).
• Swala will go from holding 74% to 61%  and new shareholders all have 10% with convertible note holders with 7%.
• Tanzanian Applicants will be allocated Offer Shares in priority to all other Applicants. Any Offer Shares remaining thereafter will be allocated to East African Applicants. Offer Shares will only be allocated to Foreign Applicants if they have not all been acquired by Tanzanian Applicants and East African Applicants.

AfDB at 50

The African DevelopmentBank (AfDB) celebrates it’s 50th anniversary this year with special events that coincide the with banks annual general meetings in Rwanda. Ahead, of that, there was a breakfast event in Nairobi today to share highlights of AfDB’s first 50 years and it’s plans for the next half century.

Some comments: 

Gabriel Negatu (Regional Director of the bank’s East Africa resource centre)

• The bank now has an AAA rating, and capital of $103 billion, half of which is subscribed by non-regional members (the latest being Luxembourg)
• The bank has lent over $100 billion with the bulk of that going to infrastructure (over 40% through water, energy, transport, ICT), then finance and agriculture (12% each) 
• Kenya became a member in 1967, and since then AfDB  has provided support worth $3.1 billion ($1.3 billion to the public sector via 28 projects like the Thika Highway and the Mombasa-Addis road)  and over $1 billion to the private sector (through financing projects like LakeTurkana Wind) 
• Their current funding is via the AfDB, an AfDB fund (non-concessional) and a Nigeria Trust Fund, but they plan another $100 billion fund to further unlock Africa’s growth.
• Lamented that while the bank has helped Africa reduce the number of it’s population who lived below $1.25 per day, that achievement has been compromised by the continent raid population growth. Also that none of the 50 top countries in the world were from Africa, and none of the top 50 in Africa were from East Africa!

Michael Kamau (Cabinet Secretary in the Ministry of Transportation - and architect of the Thika Highway project) 

• Noted that the AfDB had free learning resource center in Upper Hill Nairobi that more Kenyans should visit and utilize
• He did the concept Thika Highway with Donald Kaberuka at Serena hotel - and that later became his job to do. It turned out to be a difficult project that had many challenges including resettlement of people & infrastructure (did Kenya Power overcharge for moving poles/line?), and working with no Nairobi City Council plans/maps of laid services. But he said if they waited for perfect circumstances to do the highway project ,it would never have happened (and his job was on the line) . 
• He expects similar challenges to arise as they start the expansion of 13 kilometers of Nairobi’s Outer Ring Road which also has a common African problem of dealing with people who politicians have encouraged to settle on road space - but notes that AfDB sticks around unlike other financiers who get cold feet in such circumstances.
• He said AfDB is sometimes a better mediator of country relations than the Ministry of Foreign Affairs - noting that under the bank's regional connectivity initiative they have done a lot like arranging for delegations of Kenya and Ethiopia to travel to Tunis and meet at the AfDB meet with special sessions where road, power, border point agreements were finalized. Similar connectivity projects are on-going via AfDB supported roads between Kenya and Tanzania, including one between Holili, Tanzania and Taveta Kenya which when is actually the shortest route  to connect to Burundi and South Rwanda.
• - AfDB also quickly mobilized funding for the construction of temporary terminal at Nairobi's Jomo Kenyatta airport after fire destroyed a large part of the airport in 2013.

Financing Lake Turkana Wind

Monday this saw the signing of final agreements for the financing of the Lake Turkana Wind Power - LTWP project. This was the completion of a long, 9 year process that began with a fishing on trip on Lake Turkana, that yielded no fish, but a lot of wind on boat trip. 

The signing of finance deals worth 498 million euros (~ Kshs. 60 billion), will go towards LTWP which at Kshs. 75 billion is arguably both, the largest single wind power plant in Africa and, the largest single private investment in Kenya. 

The  Kenya Government has committed to raise the country’s electricity generation capacity to 5,538MW (from the current 1,533MW) by the year 2017. 630MW of that will be from wind, and they they have identified five strong wind areas in Ngong, Turkana, Kinangop, Kipeto and Isiolo - and hopes that using renewable sources of energy like wind will bring down the cost of electricity to consumers, and save on fuel import costs for the country.

The government’s KETRACO agency will build a 428 kilometer, 400 kV line, from Loyangalani to Suswa Suswa to Laisamis that they say will be ready in 24 months and which will also  link up with geothermal plants along the way. 

Image from LTWP website

The LTWP which will generate 300 MW, using 365 turbines in Laisamis (Marsabit) was registered in 2006, and brought one Aldwych International as an investment and development partner in 2009.

Financiers in LTWP include the African Development Bank (AfDB are the lead arrangers and who have provided a guarantee against some delays have also financed $1.7 billion in power generation in Africam with 39% iof that going to private sector companies) the European Investment Bank. Standard Bank (Stanbic), FMO, Nedbank, EADB, PTA, PKF, DEG, Proparco and soon OPIC (US)

Other partners in LTWP include Vestas (turbine supplier), the governments of Denmark (proving EUR 135 million including 120m in export credits), Netherlands, and Spain (who are financing the Laisamis- to Suswa transmission line).  

Next, the Kenya government wants to expand the number of last mile electricity connection while KETRACO also plan to extend the transmission lines to Northern and North Eastern Kenya - and on to Ethiopia, Tanzania and Uganda. This will serve the regional transmission purposes and also open up northern Kenya.

Joseph Njoroge,  the Energy principal secretary, said additional electricity opens up opporutunies such as enabling the pumping of crude oil, the Standard Gauge Railway is also planned to use electric trains, Iron Smelting, as well as clinker production (by Athi River and Dangote.

Kenya's Money in the Past: M-Pesa Money Real Quick

This recently published book traces M-Pesa from its origins to the impact it has had on millions of Kenyan users. It has excerpts of interviews with insiders at Vodafone/Safaricom, Kenyan regulators, politicians, entrepreneurs, bankers, and dozens of other people, for who the service has had an impact on their lives.

While mobile money did not originate in Kenya, and the design of M-Pesa was not local, Kenya is the country that, for now, has extended mobile money far deeper than any country, and the book notes developments in other countries to emulate the success and scale of M-Pesa.

M-Pesa was the accidental outcome of a pilot project, but it is ultimately the end result of the hard work, partnerships (such as with Commercial Bank of Africa and DFID, but some broken at Faulu and Equity banks), funding, and decisions of some of the people interviewed. 

It's development process was not widely understood, nor was it universally popular, especially with bankers, who (like almost everyone else) did not forsee the ernomity of what M-Pesa would become in the lives of hithero unbanked Kenyans. 

The book was completed in 2012, a few months before M-Pesa made a bigger foray into the world of banking when, Safaricom and Commercial Bank of Africa launched a SIM based bank account called M-Shwari.

Kenya’s Money in the Past V: Who Control's Kenya Industry

Over the holidays,  I came across a fascinating book on Kenya's economic history that was published in 1968, as a a report of a working party set up by the Department of Christian Education and Training of the National Christian Council of Kenya. 

It's a snapshot of another era when the East African Railways & Harbours was the largest commercial employer, and the Kisumu Municipal Council was a milk process - and it shows early signs of conglomerates, and the influence of policy and politics that would shape Kenya's industry in future years.

Some pages 

Blogging in 2013

Top blog posts in 2013

1. Consumer Guide on Solar for Homes
2. Kenya Bank Rankings 2012 (Part I) 
3. Kenyan M&A
4. Private Equity Moment
5. Subway (Restaurants) to Kenya
6. Why Unit Trusts are better than Bank Savings Accounts
7. Chama Management 101  (a book review) 
8. Paypal in Kenya
9. Base Titanium aims to be a model for the Kenya mining sector
10 Buyouts, Vultures, Divestments

So lot's of interest in reading up merger and investment activity in Kenya this year, but, overall, the top posts visited were Safaricom/CBA launch M-Shwari and Who Created M-Pesa  both published in 2012.

Access Kenya EGM

This morning  saw what was likely the very last shareholders meeting of Access Kenya, as a public company. The Company Secretary reported receiving 11,207 proxies representing 85% of the shareholders at the extraordinary general meeting (EGM) that was to vote on the de-listing of all the issued 218 million ordinary shares of the company form the Nairobi Securities Exchange following a buyout offer that the board of directors had already endorsed and which 75% of the shareholders had voted in favour of.

A few of the retail shareholders present asked lots of questions about the deal, and it seemed they were unhappy that just over five years after they bought shares in the company at an IPO, after which the share had risen to 38 shillings, before dropping to Kshs. 4, and getting low inconsistent dividends, in between, they were now being evicted from the company.  

Some questions/topics raised:
- Why sell out for Kshs 3 billion (~$35 million) that could easily have been raised locally? The Directors 
- Was the a capital markets (CMA) rule on the minimum number of years that a company had to remain listed after an IPO? The directors said there was none, and the regulators had approved all decisions taken by the directors in the deal 
- Some shareholders said they had bought shares at about Kshs. 18, and were taking a big loss. Directors replied that Kestrel Capital, as an independent advisor, said Kshs. 14 was a good price to take and that Kshs 14 was a big improvement  from the Kshs 4 low in the past year, and Kshs. 9 when the deal was announced and shares frozen
- Were the needs of minority shareholders considered in the negotiations, and why didn't the majority shareholders simply reduce their stakes, instead of selling the company outright?
- Why was the offer to retail shareholders structured as a 'unconditional, mandatory one? The directors said that no one was being forced out of the company, and that any shareholders who wanted to remain could do so, and they will still receive annual audited accounts from Access Kenya..they noted that there were still some shareholders of Unilever Kenya which delisted  in 2009
- What is the fate of employees who own shares in the ESO..and will they be arm-twisted to vote the shareholders acceptances past the 90% threshold? The directors said Dimension Data were a $6 billion company who's parent was a $100 billion one with ambitious plans for Access Kenya and Eastern Africa.

The final results of the shareholders voted will be tabulated by Deloitte and released in two days - and payments should be made to shareholders in September 2013. 

Turning Round the Lunatic Express

A few weeks ago, Rift Valley Railways (RVR) and Citadel Capital had a small media briefing to highlight the state of their investment in a consortium to run the Kenya Uganda-Railway. It was meant to signal an escalation in the marketing the achievements of the consortium, but is also highlight the state of the railway that they invested in about three years ago.

The railways which moved 4.2 million tons in the early 1970s’ when it last got a public investment, but had been in steady decline since with increased competition from roads and pipelines. It was then passed on by the Governments of Kenya and Uganda through a concession to new owners who, as it became apparent later, were without money or management expertise - and were down to one working train, and about to pull the plug on the venture.

The new investors, led by  Citadel and Transcentury, fund raised through debt and equity and set about rebuilding hundreds of kilometres of rail tracks that were dangerous if trains moved at their regular speeds, refurbishing locomotives and wagons, automating line movements, creating storage facilities, and putting staff succession plans in place. This year they launched a graduate trainee program that will have a class of 20 this year who were selected from 3,400 applicants, and will soon install a train simulator for training.

Passenger services are 4% of Revenue

Their concession called for an investment of $40 million in 5 years but it's taken a budget of $300 million to get where they are today, including $11 million worth of levies paid to the governments every year. They hired a management team from Brazil  who engineered similar turnarounds, and there has been some progress in going from 22 days to move cargo from Mombasa to Kampala, to a current average of 8 days. The best performance is 4 days, and their internal goal is to make that period the average by by 2015. They are back to moving 1.5 million tons a year, meeting a consortium target with s plan to get to 4.5 million tons by 2016.

But even as they are breaking even, the governments' of Kenya and Uganda are restless.In recent weeks, the Deputy President complained about the creaking 90 year old relic known as the Lunatic Express that was built by the British Colonial government, while the Transport Cabinet Secretary believes that with 20 million tons passing through the Mombasa Port, there's need for five other railways.

There are designs to have a Chinese-built wide-gauge railway from Mombasa to Uganda (to be financed with a 1.5% tax on all imported goods) and another 1,500 kilometre track from a planned new Lamu port all the way to South Sudan.

Even with clients like Total, Hass, Maersk, Coca Cola, Shell, the World Food Program Bamburi, Athi River, and EA Portland cement companies, RVR still have a way to go with proving to other corporates that they are a viable reliable option to the hundreds of trucks that make that daily journey from to and from the Mombasa Port.

Chama Management 101

Chama to Conglomerate (Reinventing your Investment Group) is a book by Tony Wainaina, an investment banker, who was also the C.E.O of the Transcentury Group. 

In it, he highlights key pointers and pitfalls that Chamas (informal investment groups) may encounter  in meeting their (initially) ambitious growth plans, such as dealing with members with different expectations & commitment to the group, the importance of hiring professionals, avoiding mediocre management, getting all members to bring the best investment ideas to the Chama, the problem of meeting in social places, importance of strategic planning, time-keeping, & record-keeping - and some common sense lessons - such as if everyone is talking about a particular investment, it's already too late Safaricom IPO)

He also gives examples of other Chamas of people who turned informal meeting sessions into investment groups that invested, some with success and others with difficulties such as with members who have different expectations and level of commitment, land purchases, dealing with KRA (taxation).

There is also a brief mention of what is arguably Kenya's most famous Chama which began at a goat eating party in Athi River in 1997.which was not the most optimistic time for Kenya. It became the Transcentury Group which roped in 29 members who put up Kshs. 24 million that was invested into local NSE shares, Castle Brewery, East African Cables, Aureos, Rift Valley Railways, Helios, and which all led to their own eventual listing at the Nairobi Stock Exchange in 2011.

The book is a short, nice, easy read that you'll want to have with you, and refer to as your Chama grows, or  gets stuck like some of the examples highlighted. It also includes sample documents and guides  like 'Letters of Intent,' 'Investment Term Sheets,' 'Non Disclosure Agreements,' and steps to concluding a Kenyan land deal.

The Book is sold at Text Book Centre, Bookpoint- Moi Avenue and is also available on Amazon for the e-reader investor types.