Another bank, Credit Agricole, voted this week to stop financing coal mining. Suggesting this is becoming a space with little competition for investment — and perhaps therefore considerable opportunity.
Like the newly opening coal fields of Kenya. Where this week the government awarded two new exploration blocks — just the second and third ever offered in the country.
Kenya’s energy and petroleum ministry said Tuesday it has chosen developers for the so-called A and B blocks of the Mui Basin, in the country’s eastern region.
The two coal licenses will go to a consortium including China’s HCIG Energy Investment Company — and also including local player Liketh Investments Kenya. The Chinese developers are reportedly also providing up to $2 billion in funding for a coal-fired power plant to be fed by supply from these blocks.
The move is a critical one for politics in this emerging energy supply region. Showing that China is further cementing its influence here — after Chinese firm Fenxi Mining was previously awarded mining rights for Kenya’s first-ever coal license in 2011.
A number of Chinese engineering firms have also partnered with local investors on a proposed 1,000 MW coal-fired power plant near the coastal town of Lamu.
Such influence could be important here. Given that eastern Africa — and particularly Kenya — is shaping up as one of the only untapped coal supply sources for Asia.
The geography is obviously favourable in shipping to major coal importers like India and China. And Kenya appears to have more viable infrastructure than other would-be coal producers in the region such as Mozambique.
To boot, Kenya is in the midst of a major round of oil drilling — which will likely see considerable infrastructure built across the country. Potentially making this an emerging hub for energy-hungry Asia.
Watch for announcements on further coal blocks being offered here. And for the identities and nationalities of developers who pursue them.
Here’s to an energy star being born,
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