Kenya seeks UK help to produce nuclear energy

Kenya is looking for long-term investment in its energy sector, particularly the use of solar, wind and geothermal energy, a government delegation has told UK investors.

The country is also keen to exploit coal and nuclear energy, a move that is likely to spark controversy.

Both Prime Minister Raila Odinga and Energy minister Kiraitu Murungi told potential investors in London that there was no reason why the use of nuclear energy could not become a reality in Kenya. Nuclear energy can be used to produce electricity and is considered a much cheaper source than hydropower, on which Kenya relies.

However, even hydropower is threatened because of unchecked destruction of water catchment areas, including the Mau Forest, which is the source of major rivers. Only last week, the inauguration of the Sondu Miriu power project was postponed after the water levels in the river feeding the turbines dropped due to cutting down of trees in the Mau.

Electricity charges in Kenya are among the highest in the region and they could increase this month when new tariffs take effect. The country has been trying to exploit coal deposits in Ukambani without much success. Recently, assistant minister David Musila, who is the MP for Mwingi South, said efforts to start coal mining in the area were being frustrated.

Industries which use coal in Kenya import it from South Africa and Botswana as local resources remain untapped.

Nuclear energy uses “utility-scale reactors” to heat water which in turn produces steam that is converted to produce electricity. Today, more than 15 per cent of the world’s electricity is generated from nuclear sources. However, this method has sparked controversy in countries like Libya and Iran which have been accused of using the technology to experiment with the manufacture of nuclear weapons. But in countries like Germany, the technology has been used to produce alternative energy alongside other renewable sources like solar and wind.

In Kenya, foreign direct investment rose from about Sh3.7 billion ($60 million) in 2006 to Sh5.3 billion ($85 million) last year. However, it is likely that this figure could drop significantly this year as investors watch Kenya recover from the effects of the post-election violence in which more than 1,200 people were killed and another 350,000 displaced.

According to government estimates, property worth more than Sh60 billion was destroyed in the violence. Tourism and other industries also suffered major blows and are yet to recover. The British government, which is supporting the conference dubbed Investing in the new Kenya, invited Mr Odinga and other key Government leaders for top level talks on how to revive the economy.

Top on the agenda

As part of the negotiations, Mr Odinga held talks with his British counterpart, Mr Gordon Brown, UK Foreign Secretary David Miliband and Secretary of State for International Development Douglas Alexander.

Kenya’s economy was top on the agenda of the talks which focused on how the country could overcome the challenges posed by the post-election violence.

Acting Finance minister John Michuki said that the latest statistics indicated that business had taken a substantial hit following the January and February violence sparked by the disputed presidential election results.

  Mr Odinga said the cornerstone of the new economic agenda was to create a “one stop shop” to ensure that investors do not have to deal with various ministries before getting approval for their investment plans.

  His views echoed similar promises made in the 1990s by president Daniel arap Moi and other ministers in the Kanu administration which was defeated in the 2002 General Election. Mr Murungi said the ministers were not in London with begging bowls but were interested in “serious business people who wish to make money in Kenya.”

Ministers said they were ready to embrace new ideas on future investment possibilities and were particularly considering Public Private Partnerships (PPPs) to improve infrastructure. Mr Michuki said that although Kenya had seen negative growth rates in the first quarter of 2008, the Government still expected overall growth rates to reach between 4.5 and six per cent by the end of the year.

Mr Odinga said that the Government’s aims were to hit consistent growth rates of more than 10 per cent in three years.

In an address to members of the UK Houses of Parliament and the Kenya Society, Mr Odinga said that following the December 2007 elections “Kenyans had looked down the abyss and didn’t like what they saw.”

But he also said that from the crisis had come opportunity and the traumatic events had “taught Kenyans that they needed each other”. “We want to show people now that it is possible to share power,” Mr Odinga said.

“The only way to eradicate poverty in Kenya is to create wealth. Creating wealth will mean creating the right business environment which includes tackling corruption.

“Nobody will be sacred in this. If people are mentioned (in connection with corrupt dealings) they will be asked to step aside so that investigations can happen. If they are found innocent they will return to their posts. If not we will push them away.”

Mr Odinga disclosed that the Kenyan police in particular would be subject to vigorous checks.

Post-election violence

His views were echoed by Mr Murungi who said that Kenyans were determined “not to be victims of yesterday,” and that it was time “as leaders to build a positive Kenya.”

Tourism minister Najib Balala said that in many ways, the post-election violence could prove to be “a blessing in disguise” provided that lessons are learned and that it would ensure “peace is not taken for granted.”

Mr Odinga stressed that the Kenyan diaspora was vital to Kenya’s development and that the Government would improve opportunities for Kenyans abroad to invest, including providing tax incentives such as not having to pay stamp duty on buying a house. The ministers said they were looking for investment in six key areas: Energy, financial services, ICT, agriculture, tourism and improving infrastructure.