Category Archives: Far East

African Energy Mega Projects: financing options and study timeframes (1.1)

The “fastest sustained growth rates” in any power sector’s history came from industrialising Vietnam and China. 14 % a year.

“People liked what they saw because of the speed at which it was built,” says Moses Ikaria, the managing director of the Kenya Investment Authority, referring to the eight-lane highway put by the Chinese between Nairobi Kenyan industrial town of Thika. The 45 km asphalt job took less than four years to complete. “The perception here was that roads took a long time to build”

As the Financial Times observes,  in a speech at the official reception for the Japanese emperor’s birthday, Tatsushi Terada, ambassador to Kenya, said: “A Japanese project might cost more but the life cycle cost in the end is much better because it requires less maintenance.” Whereas Japanese investment is usually regarded as reliable and of excellent quality, China quickly catches up on quality and is known for its speed.

In 2015 government officials from 17 Francophone Africa countries pledged to monitor, evaluate and publicly report their public financial management progress on an annual basis. Starting from 2018.

Morocco flips the switch on the world's largest solar facility. When they are finished, the four plants at Ouarzazate will occupy a space as big as Morocco’s capital city, Rabat, and generate 580MW of electricity, enough to power a million homes. Source: CNN.com
Morocco flips the switch on the world’s largest solar facility. When they are finished, the four plants at Ouarzazate will occupy a space as big as Morocco’s capital city, Rabat, and generate 580MW of electricity, enough to power a million homes. Source: CNN.com

It’s a welcome action in line with the IMF urging full accrual-based recording of transactions to capture other economic flows in fiscal reports. “The international community must be ready to assist. This next decade will be pivotal,” stresses Alta Prinsloo, executive director, strategy, and chief operating officer at the International Federation of Accountants. “Enhanced public financial management, including increased transparency and accountability, is a first but fundamental step towards ensuring sustainable economic growth, better public services.”

Electrification rates are as low as 9 – 20% in many Sub-Saharan African countries. “Failure by governments to allow cost-reflective tariffs is the single most important reason for the lack of power development in sub-Saharan Africa,” argues David Humphrey, head of infrastructure and power at Standard Bank.

While utility-scale projects such as Morocco’s 510 MW solar project and Kenya’s 300 MW wind project have secured key financing to begin construction — the first 160 MW phase of Morocco’s project will begin operating later this year — nearly all of the capital was from public sector sources such as the World Bank and African Development Bank.

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Côte d’Ivoire was one of the first countries in sub-Saharan Africa to privatise its electricity sector and, today, independent producers play a significant role in the country’s electricity generation. The country is now willing to prioritise hydroelectric projects, in order to balance the energetic mix. Yet, as demand grows, the private sector still offers substantial potential for independent operators.

Foreign investment has been a feature of the Ivorian electricity market for a quarter of a century, starting with the privatisation that created the Compagnie Ivoirienne d’Electricité (CIE), the power supplier and distributor at the heart of the sector. Eranove, the company that now owns a majority stake in CIE, also owns Ciprel, one of the country’s independent power producers (IPPs). “One of the advantages here is the tradition of private investment in the electricity sector,” says Amadou Ba, managing director of Endeavor Energy, which plans to build a 375 MW power plant. “Even in the middle of the [2002-10 political] crisis the power continued to flow.”

Luc Ayé, managing director at Azito Energie, another IPP, says in a FT interview that a key to success is a defined set of rules for how CIE has to pay the independent power generators. This “waterfall” structure gives IPPs a relatively high place in the payments queue. “That allows transparency in the sector and all the operators know that we are going to get paid. It is the basis for everything that has made Côte d’Ivoire attractive for investment. It has never been called into question,” Mr Ayé says, adding: “There are very few countries that have such a clear organisation and structure.”

Endeavor Energy’s Amadou Ba says another advantage is that the country is “very good at structuring bankable power purchase agreements”. That makes it easier for IPPs to raise project finance.

Next part

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Global microgrid trends and major players in smart city energy for Africa

The reality is such that not enough investment capital flows into African clean energy projects.

One option to consider for smart cities in Africa is green bond issuance. Green bonds are used to finance projects in renewable energy, energy efficiency, low-carbon transport and wastewater treatment.

In the fourth quarter of 2015, the issuance of green bonds reached $15.2 billion, boosted by activity by financial institutions in the build up to the Paris climate talks.

The dearth of private institutional investor capital, such as U.S. and European pension funds, which manage trillions of dollars, is especially glaring. While utility-scale projects such as Morocco’s 510-megawatt solar project and Kenya’s 300-MW wind project have secured key financing to begin construction — the first 160-MW phase of Morocco’s project will begin operating later this year — nearly all of the capital was from public sector sources such as the World Bank and African Development Bank.
No wonder that — with 673 projects (4,800 MW) — the United States continues to lead the global microgrid market of 1,437 microgrids worldwide, totaling 13 GW in 100 countries. Alaska remains the number one state with 900 MW of microgrid capacity, followed by New York with 151 MW.
And then there is 816 MW near the Arctic Circle in the Far East of Russia.
infographic_africa_electricity4

Avoiding redundant investments in smart city infrastructure is another big theme for Africa.

Alignment between stakeholders is not easily achieved due to the varying business models of cities, utilities, and private stakeholders. Globally, technology and standards for interoperability are lagging behind the conceptual goals of the smart city.

Market barriers range from financial and business risk, regulatory hurdles to city and utility silos as well as limited access to data.

Enacting policies to reduce capital costs and risks is important. Governments can help reduce transaction costs by promoting contract standardization and securitization. Egypt, Kenya, Uganda and South Africa, among them — now have feed-in policies where the government guarantees a price (often at a premium) to compensate producers for certain types of renewable energy.
Full report by smart city experts Navigant Research,
with stats for Africa and charts like Annual Smart Energy for Smart Cities Technology Revenue by Segment, Middle East & Africa: 2015-2024 (download available here)

In terms of global R&D

the University of Tennessee‘s Center for Ultra-Wide-Area Resilient Electric Energy Transmission Networks is on the forefront of microgrid technology in the world.
Key person: Dr. Chien-fei Chen
Dr. Chen’s environmental research areas include energy literacy and the diffusion of renewable energy knowledge, environmental beliefs, attitudes, behaviors and public opinion over environmental issues.
Major Smart Energy for Smart City Players

ABB

Accenture

AT&T

Cisco Systems

Hitachi

Huawei

Itron

Oracle

S&C Electric Company

SAP

Schneider Electric

Siemens

SSN

Toshiba

ABB leads all vendors in terms of total microgrid capacity and Schneider Electric leads in terms of the total number of microgrid projects in its development pipeline. The leading resource choices are diesel in terms of capacity and solar PV in terms of being included in microgrid projects.

The Euro-Ukrainian way: business planning for construction product/technology to be purchased from China

We continue our series of conversations with globe-trotting Oleksandr PietushkovChief International Officer at Ukrainian Union of Building Materials’ Manufacturers, to regularly take the pulse of Ukraine after The Ukraine–European Union Association Agreement. This time we travel south-east to China.

How did you find out about the ES Build Expo in Shanghai in the first place? Why was the Ukrainian Union of Manufacturers of Building Materials and Products attracted to it? It is quite far from Ukraine.

Well, we monitor the exhibitions in China from time to time: the technology develops there very rapidly and the cost of these new technologies is often much lower compared to, say, Europe. Besides, green construction, energy-efficiency and sustainability — which this exhibition was about — have become not only trends but also the reality that bites. We have to re-think the way we use energy and resources in construction and production of building materials in Ukraine.

Oleksandr Pietushkov, Chief International Officer at Ukrainian Union of Building Materials’ Manufacturers, (2nd from right) with Ukrainian construction material manufacturers in Shanghai, July 2015
Oleksandr Pietushkov, Chief International Officer at Ukrainian Union of Building Materials’ Manufacturers, (2nd from right) with Ukrainian construction material manufacturers in Shanghai, July 2015
Is it a typical situation in your line of work as the Chief International Officer to visit concrete products manufacturers in China like Xuelong plant in Shijiazhuang, Hebei? Or is it a sign of growing interest among Ukrainian companies to partner with Chinese colleagues in the construction material sector? What are the benefits of such partnerships for both parties?

Yes, it’s quite common for us to assist Ukrainian companies with establishing economic ties with Chinese companies. We work on different levels: help with business communication and try to provide some essential business planning on the product or technology to be purchased from China. Mostly we do this when we are dealing with acquiring of new technology or production line because the amount of investments is quite high so you need to think and plan thoroughly. And this is the case when expert advice is welcome! And as for benefits, there used to be a time when you considered German or Italian equipment as the only one reliable, though quite costly.  Not anymore — the Chinese have achieved a lot in production culture — and big European players are aware of that now. And at the same time the price for the production line can be 2-3 times cheaper than the one you might get from Germany, for instance. We also need to consider that in construction sector, technology is pretty simple. No doubt Ukrainian manufacturers should take a closer look at what China has to offer.

Was it a challenge to arrange such a visit to Xuelong plant remotely from Ukraine? Apparently the Chinese side was quite forthcoming!

It wasn’t a tough task. Our Chinese partners helped to arrange some travel issues and the potential partners from Xuelong Enterprise were really forthcoming: we felt very welcomed there! Besides China has been transforming stunningly fast. My last visit to this region was several years ago and this time I was pleasantly surprised by how tourist-friendly big Chinese cities have become. Although language still remains a big issue…

How did you find the issue of language? Is it imperative for Ukrainians to travel to China with their own Mandarin speaker as part of the delegation?

From my own experience, I would strongly advise to travel with your trusted interpreter (or have one in China) who knows about your business area and can do some basic business analysis in China. It’s not even a question of trust rather a question of professionalism and mentality. Sometimes you need to ask a Chinese person one question three times in a row but formulate it each time differently to get an answer! So it goes without saying that some communication difficulties and operational misunderstanding occur. But once you get used to it you will work out a system to do business with the Chinese smoothly.

Concrete products manufacturing line in Shandong province, China
Concrete products manufacturing line in Shandong province, China
Tell us more about the line in Shandong province and your overall impressions from the business visit?

Visiting an operating factory was an obligatory condition that we expressed to our Chinese partners. We wanted to see the production line in action. So they showed us the factory in Shandong province.

Concrete products manufacturing line in Shandong province, China.
Concrete products manufacturing line in Shandong province, China. “It is a rather new one and doesn’t run to full capacity yet,” shares Oleksandr Pietushkov, Chief International Officer at Ukrainian Union of Building Materials’ Manufacturers.

It is a rather new one and doesn’t run to full capacity yet. It was less than we expected. That underlined that you need to prepare your visits to China in an even more detailed way: studying technology, pictures, exchanging drawings and layouts. Because it’s still a long way to reach there, you’d better be well prepared to spend your time there in the most effective way.

How soon do you plan to be back in China with more business partnerships growing between the Middle Kingdom and Ukraine?

Actually we visit China quite often (exhibitions, company visits etc.) and this time around we also invited our Chinese could-be partners to visit Ukraine to see the production themselves and to develop an on-site-based offer for the production line. There’s a lot of work ahead…

Movie parlors to come and go: dress as on-screen characters in Chuvashia, don-t text in Ukraine-s only spherical cinema and enjoy the wind in Kabul-s Smell-o-Vision

What is it about movie parlors that makes us turn nostalgic?

Would you cry over a movie house that kicks out patrons for texting during a show? And if I told you that this is a parlor where viewers eat only when the on-screen characters do and everyone is to dress as a particular character, and.. “cold beers are brought to your seat by black-clad waitstaff?”

Should the world’s oldest operating outdoor picture garden in Australia be preserved almost unchanged — with loos marked “Humphrey’s” and “Vivien’s” “as a nod to early Hollywood stars” — or should it be fitted with repurposed car seats à la gastropub theater in Brooklyn’s waterfront DUMBO district? For all our non-NYC cinemagoers: DUMBO stands for ‘Down Under the Manhattan Bridge Overpass.’

In this Calvert Journal pieceSergey Novikov — Cheboksary, Chuvash Republic-born photographer who self-published FC Volga United, a photobook about football fans who live along Europe’s longest and largest river in terms of discharge and watershed, the Volga — sings on ode to Russia’s dying movie houses:

With more and more cinemas in Russia losing out to multiplexes — sometimes abandoned, sometimes used for discos and fairs or taken over by Jehovah’s Witnesses

Here is where Al Jazeera’s Jane Ferguson laments that Afghanistan’s once thriving cinema industry has not returned after 2011 ousting of the Taliban:

[youtube https://www.youtube.com/watch?v=ECWJxmNwDEM]

While in this 2012 article for Asahi Shimbun, one of the five national newspapers in Japan, Kazuhisa Kurokawa announces the coming down of the curtain on a part of the cinema landscape of Tokyo “that first enraptured Japanese audiences just over a century ago.”

On Oct. 21, the lights went down in the last remaining three movie houses in Asakusa, a historic district just off the Sumida River where the nation’s first movie theater opened in 1903. The structures escaped the devastation of the Great Tokyo Air Raid of 1945 by U.S. bombers but were too old to be retrofitted to withstand a major earthquake. The theaters were operated by Chuei Co., a subsidiary of Shochiku Co.

Shochiku Co. produced films by Yasujirō Ozu, Takeshi Kitano, Akira Kurosawa and Taiwanese New Wave director Hou Hsiao-Hsien.

SHOCHIKU Co., Ltd logo
SHOCHIKU Co., Ltd logo

While the final screenings in Asakusa included Amazing Spiderman and Men in Black III, Ukraine’s budding film-maker Masksym Madonov deemed it right to bring an abandoned 1990-built cinema in his hometown of Radekhiv, Lviv Oblast back to life and make a documentary about the rare four screenings.

And as we decry the vanishing cinemas with history, we embrace all kinds of technology-packed movie houses. Here Bloomberg’s Jon Erlichman takes us on a tour of a South Korea-stemming 4DX test cinema.. with Smell-o-Vision in Hollywood, California. Full package there: moving chairs, scent, smoke, and wind.

Purpotedly the only spherical cinema in Ukraine operates under the name Atmasfera. The action takes place inside the Soviet-built Kyiv planetarium, on its dome screen.

Throughout its 90-year history, the largest cinema in northern Europe, Oslo’s Kino, “has kept up with technological advances, from pioneering Cinemascope in the 1950s to the late-1990s THX-aimed overhaul.”

Chicago’s Uptown Theater is not that up-to-date.  Once one of the largest in America, the Uptown “still stands at Broadway and Lawrence, its decaying interior like a mausoleum,” as late film criticism celebrity Roger Ebert put it.

This view of the Uptown Theatre’s auditorium mezzanine or loge seating area comes from Eric Holubow, photographer behind a cofee table book called Abandoned – America’s Vanishing Landscape.

chi

Note the three colors of cove lighting and careful decoration of the plaster underneath the balcony and surrounding ventilation grilles. These atmospheric effects make one forget one’s troubles and that one is sitting under an immense balcony. The Uptown’s cove lighting system is controlled from a master lighting control panel on the stage. The lights were intended to help encapsulate the audience through the subtle use of changing colors. They could be preset and adjusted to fit the mood of what was being seen on the screen, watched in a live stageshow or heard from the organ and orchestra.

An abandoned movie palace hidden in the back of a Brooklyn furniture showroom... Source: AbandonedNYC
An abandoned movie palace hidden in the back of a Brooklyn furniture showroom… Source: AbandonedNYC

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