Renewable Energy Firms Find Boon In Poisonous Weed

Renewable Energy Firms Find Boon In Poisonous Weed

U.S. and African energy investors have found a way to capitalize on a poisonous plant that was introduced into Kenya in the ’80s from South America to stop desertification.

Over the decades the mathenge plant (scientifically named Prosopis juliflora) thrived in arid Kenyan regions, fulfilling its purpose and slowing erosion.

A kind of mesquite, it’s native to Mexico, South America and the Caribbean. It’s known by other names including bayahonda blanca in Spanish, bayarone in French, algarrobe, cambrón, cashaw, épinard, and mostrenco.

Unfortunately the plant’s aggressive expansion had unintended consequences in Kenya. The invasive and poisonous weed destroyed grazing grounds used by livestock, choking out other native plant species.

Recent estimates suggest mathenge covers hundreds of thousands of hectares in Kenya’s Baringo, Garissa, Tana River, Turkana areas, and it’s increasing every year.

Herders say goats that feed on the poisonous plant lose teeth which results in the animals not being able to chew pasture, inevitably leading to their death.

In 2006 Kenyan herders sued the government for introducing the mathenge plant, claiming that the invasive weed was threatening their livelihoods.

Mathenge is also a major problem in Ethiopia, where it’s known as the devil tree by the pastoralists in the Afar region, according to the Centre for Sustainable Development Initiatives, a Kenyan non-governmental organization. Mathenge is also an invasive plant in Sudan, Chad, Australia, U.S. and India, among others.

The Centre for Sustainable Development NGO tries to solve natural resource problems in Kenya’s drylands.

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Power generation

The weed, a woody biomass, is harvested similar to sugar cane and lumped into batches. The batches are then transported to the sites where generators are located. When dry, they are fed into kilns which burn the dried weed and the heat generated is converted into power.

Cummins Power Generation, a subsidiary of Cummins, an Indiana, U.S.-based Fortune 500 Company, and Nairobi-based Viability Energy Ltd. are putting up power plants that will harvest mathenge, burn it and generate power.

Viability is a project development and financial advisory firm focusing on commercial and utility small-and-medium-scale renewable energy projects based in Kenya, Rwanda, Tanzania, Uganda, Ethiopia and Ghana.

Starting in March, Cummins said it plans to begin generating 2.5 megawatts and gradually scale this to 10.8 megawatts.

The firm has invested $30 million in a plant that will be generating power by burning dried mathenge weed and converting the heat into electricity.

In addition to getting connected to the grid, residents of Baringo, a town deep in Kenya’s Rift Valley, stand to gain by selling the harvested weed to the power company.

Government incentives for renewable energy

Kenya’s government has an ambitious plan to add 5,000 megawatts by 2017 and has sweetened the deal for investors, drawing companies like Cummins to put up power plants in remote areas of the country.

One of the biggest incentives is power purchase agreements — contracts that guarantee the government will buy power for at least 20 years at an agreed-on price, ensuring a steady flow of income.

“Power is an attractive sector because of the long-term nature of the returns,” said Kyle Denning, CEO of Viability Energy Ltd. in an interview with AFKInsider. “It is one of the most necessary investments to make to develop an economy, and Kenya has done a good job of structuring a favorable environment in the energy sector.”

Viability Energy is also putting up a similar plant in Garissa, a town in Northern Kenya where others claim to be victims of the mathenge menace.

Viability plans to begin construction of a 2.5-megawatt plant by the end of 2015 and the energy company is investing $10 million in the venture.

The power plant will be fed by mathenge weed harvested from an area said to cover some 100 square kilometers (38.6 square miles).

Other energy firms say that markets such as Kenya’s are attractive because there is so much demand for power with few players and a variety of renewable sources such as geothermal, wind and solar being available.

“As an emerging market, Africa is essentially a blank slate that has a vast resource in terms of the climate thus they are getting in at the ground level. And the fact that there aren’t many African entrepreneurs investing in the energy industry means competition is also minimal so conditions are very favorable,” said Lois Gicheru, founder of Kenya energy firm Solafrique, in an interview with AFKInsider.

Like Denning, Gicheru agrees Kenya’s government is doing a good job of attracting investors.

With Kenya’s government target of 5,000 megawatts to achieve in the next few years, “they need to open up the market for foreign investors,” Gicheru said. And conditions are just right, he added. Solar prices are falling, the government is improving renewable energy policies and there’s a lack of competition from locals, most of whom focus on retail products and not retail electricity.

Investors and energy analysts say that they expect more firms to continue to come to Kenya but the pace can be hastened if there were some tax breaks, especially for small firms that need easier access to financing.