• Tuesday, 21 May 2024
Kenya halts construction of a cooking gas facility owned by a Tanzanian entrepreneur.

Kenya halts construction of a cooking gas facility owned by a Tanzanian entrepreneur.

The Energy authority has refused to approve Taifa Gas's application, which is controlled by tycoon Rostam Aziz, citing environmental dangers presented by the 30,000-ton gas processing facility.

The advent of the business magnate, who was named Tanzania's first dollar billionaire by Forbes in 2013, promises a ferocious war for control of the Kenyan cooking gas sector, which is still tightly controlled by Mombasa-based businessman, Mohamed Jaffer.

The arrival of Taifa Gas into Kenya is part of a commercial agreement signed by Kenyan President Uhuru Kenyatta.

The regulatory licensing freeze threatens to reignite the trade battle between Kenya and Tanzania, which saw Dar es Salaam bar Kenyan goods from entering its market.

The billionaires' duel between Mr. Jaffer and Mr. Aziz, 57, was intended to reduce the cost of transferring and removing cooking gas from ships to the mainland, allowing dealers to pass the savings on to customers.

Mr. Aziz's ambitions to establish a presence in Kenya's retail cooking gas business appeared to be setting the stage for another market battle with oil dealers such as Vivo, Rubis, and Total for control of the 2.87 million households (23.9 percent of Kenyan households) that use liquefied petroleum gas (LPG) for cooking.

"We did not pass their Environmental and Social Impact Assessment (ESIA) due to technical flaws." "The EIA has certain technical problems that we want them to correct before we review their application further," said the Energy and Petroleum Regulatory Authority (Epra).

The regulator did not reveal any details on Taifa Gas, Tanzania's largest gas marketer with more than 30 LPG handling plants.

Taifa Gas intends to construct the 30,000-ton Kenya plant at the Dongo Kundu Special Economic Zone, near the Port of Mombasa. It will join Jaffer's firm, Africa Gas and Oil Ltd (AGOL), on the short list of companies that handle and store gas at major African entrance ports.

Following an upgrade of the facility built in 2013, AGOL now has a storage capacity of 25,000 tonnes of LPG.

The plant was developed to facilitate large imports of cooking gas, lowering unit costs through economies of scale and alleviating shortages.

In the lack of government expenditures on import and storage infrastructure, private enterprises have been racing to gain from Kenya's expanding use of cooking gas.
This is why the affluent Mr. Aziz wants a share of Kenya's gas industry.
Mr. Aziz helped Vodacom South Africa enter Tanzania and formerly owned an estimated 35% stake in Vodacom Tanzania.

In 2019, he completed the sale of the final tranche of his Vodacom Tanzania shares, netting him billions of shillings.
Apart from his ownership in Vodacom Tanzania, he amassed a fortune from investments in Caspian Mining, significant real estate in Tanzania and the Middle East, and investments in Tanzanian media.

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