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J. M. Kariuki
regimes and political stability. For the host governments, they are mostly
concerned with attracting energy investments and ensuring that the
country benefits from the energy projects through revenues and empowerment of the local people. In recent years, we have seen an emphasis
on concepts such as local content and social license to operate. All these
have an impact on energy investments in Africa; however, this section
will focus on Chinese investments on the continent with the example of
Guanxi below.
• Guanxi—China, Inc.
In the business of investing in Greenfield, risky projects/investments,
the common rule of thumb is that out of 10 start-ups/projects, only
three or four fails. Another three or four return the original investment,
and one or two produce substantial returns. The People’s Republic of
China is saliently taking this approach as it finances numerous projects
around the 54 countries in Africa. How this unravels in Africa is not ever
straightforward to the untrained eye, but with some patience, one can
get an understanding of how the communist state operates as a venture
capitalist and angel investor.
To begin with, when we take the case of Kenya, the High Grand Falls
Dam was conceived in 2009 as part of an ambitious effort to build 1000
water reservoirs across the country and boost irrigation-based farming.
The project is also projected to cover 165 square kilometres, and the dam
will hold 5.6 billion cubic metres of water in the process adding 700 MW
to the national power grid. The host government tried to get the project
off the ground via grant funding applications from multilateral development banks, which were not successful. It is only in late 2013 that
real work commenced with the feasibility study, hydrological and other
pre-construction studies. This was made possible by the involvement of
China State Construction Engineering Corporation (CSCEC).
This is a very costly project at US$1,642,300,000 with the hydroelectric component costing investment and recurrent costs, including
engineering services but excluding compensation costs final resettlement action plan {RAP} and physical and price contingencies at
US$117,000,000 (USD 26,000/ha) and US$3,100,000/year (USD
J. M. Kariuki
regimes and political stability. For the host governments, they are mostly
concerned with attracting energy investments and ensuring that the
country benefits from the energy projects through revenues and empowerment of the local people. In recent years, we have seen an emphasis
on concepts such as local content and social license to operate. All these
have an impact on energy investments in Africa; however, this section
will focus on Chinese investments on the continent with the example of
Guanxi below.
• Guanxi—China, Inc.
In the business of investing in Greenfield, risky projects/investments,
the common rule of thumb is that out of 10 start-ups/projects, only
three or four fails. Another three or four return the original investment,
and one or two produce substantial returns. The People’s Republic of
China is saliently taking this approach as it finances numerous projects
around the 54 countries in Africa. How this unravels in Africa is not ever
straightforward to the untrained eye, but with some patience, one can
get an understanding of how the communist state operates as a venture
capitalist and angel investor.
To begin with, when we take the case of Kenya, the High Grand Falls
Dam was conceived in 2009 as part of an ambitious effort to build 1000
water reservoirs across the country and boost irrigation-based farming.
The project is also projected to cover 165 square kilometres, and the dam
will hold 5.6 billion cubic metres of water in the process adding 700 MW
to the national power grid. The host government tried to get the project
off the ground via grant funding applications from multilateral development banks, which were not successful. It is only in late 2013 that
real work commenced with the feasibility study, hydrological and other
pre-construction studies. This was made possible by the involvement of
China State Construction Engineering Corporation (CSCEC).
This is a very costly project at US$1,642,300,000 with the hydroelectric component costing investment and recurrent costs, including
engineering services but excluding compensation costs final resettlement action plan {RAP} and physical and price contingencies at
US$117,000,000 (USD 26,000/ha) and US$3,100,000/year (USD