Business & Economy

Kenya’s high society billionaire plots wealthy future

Kenya’s high society billionaire plots wealthy future
  • PublishedNovember 5, 2015

In his usual impeccably well-tailored attire, Chris Kirubi can be found alongside catwalk queens, gracing society magazines or entertaining listeners on his music show under the moniker “DJ CK”. Never mind that he does this radio show on his own station.

Away from the entertainment scene, Kirubi will appear dapperly dressed in double-breasted suits with presidents and diplomats, discussing economic policies. But behind the smile is a perceptive mind that has weathered the storms of East Africa’s bullish stock markets and mastered the intricate art of corporate boardroom negotiations, whose scale is almost always dizzying multi-billion-dollar deals.

Kirubi has been among the key faces known as Kenya’s “Mr Money Bags” for five decades and counting, with vast interests in energy generation, fast-moving consumer goods, media, health care, hospitality, financial services, processing, retailing, real estate and even manufacturing. And just when one begins to think that he is considering letting his astute ideas rest, Kirubi says he is still dreaming of new investment ventures.

“I dream of how to create wealth,” Kirubi begins in our interview. “I know I haven’t achieved all I want and I am still working on doing more. We are not theoreticians, we are practical and know how to do business in Africa.”

Creating wealth

To give credence to his dreams to “create wealth”, Kirubi articulates his roll-out of two mammoth mega-bucks power projects and East Africa’s largest shopping mall simultaneously.

“You cannot be competitive in the world if your cost of energy is high. For Kenya to supply the world we must make our energy competitive. At the moment our costs are a hindrance,” Kirubi says and cites Ethiopia, which has become East Africa’s leading exporter of electricity.

“Ethiopia is very competitive. If the Ethiopian economy was open they would be very competitive with us,” he adds.

On the one hand Kirubi has marshalled a constellation of local and international investors to realise the $2bn Amu coal-fired power plant in the Kenyan coastal county of Lamu.

This fossil fuel power plant, which is expected to generate an additional 981MW into the national grid, has in the recent past generated controversy among the Lamu Island residents and environmentalists keen on the heritage status of the region. The billionaire businessman does not fret about the answers he gives.

“Coal power is what is used in many developed countries with few complaints but it becomes a sensitive subject when developing countries want to use it. Their plans are our task as African countries is to plant trees so that our forests can clean the air which the developed nations have made dirty, thereby slowing our progress,” he contends adding:

“We cannot hold back development. We have lots of young people graduating and they don’t have jobs. We will be installing modern technologies in our coal plant to reduce pollution. We must have progress and at the same time safeguard the environment.”

A known pan-Africanist, Kirubi says there is great and limitless potential on the continent but believes more can be done:

“Our young people need jobs. Without jobs they are lured easily to drugs, crime and even extremist groups. But a guy with a job thinks of a home, a wife and investments. He has little time for mischief.”

On the other hand he has advanced plans for the $300m Akiira geothermal power plant in the Rift Valley county of Nakuru, a 2-hour drive north-west of the Kenyan capital Nairobi, which is expected to generate 140MW.

In between is his $161.2m Two Rivers shopping mall right at the heart of Nairobi’s diplomatic hotspot.

“My work is development. In Uganda I have over 300 acres near Lake Victoria. I want to build a new town to boost Uganda,” Kirubi says.  “We are developing 100 acres at Runda under the name Two Rivers. This will be the sub-Saharan’s largest and most advanced lifestyle centre. Nairobi won’t be the same again. I only hope my good friend Governor Evans Kidero will wake up and see the potential of the city he leads. We have many ambitions.”

The story of East Africa’s entrepreneurship is not complete without a mention of Kirubi. He is not only a mega-dealmaker, but has substantial interests outside his native Kenya.

He is making large business footprints in Uganda and Tanzania and looking for even more opportunities outside of the East African Community (EAC) bloc.

The iconic International Life House, which features prominently in Nairobi’s central business district skyline, serves as the nerve centre of Kirubi’s operations.

“In one day I am working on 10 different things, not just Amu Power and Akiira Geothermal Plant. I have to talk to the Maasai near the geothermal plant to make them understand and accept our proposal,” Kirubi says. “Similarly I have to talk to the leaders and communities in Lamu on the same about Amu Power. All these challenges keep you awake. But I can assure you in another five years we will have done much as we have very tight delivery schedules with the government.”

Build, Own, Operate

In the Amu Coal Power Plant Kirubi’s firm, Centum Investments, is partnering with Gulf Energy and Chinese venture capitalists to scoop the major tender. Amu Power is the electricity generating company set up by the Gulf Energy-Centum Investments Consortium. It will operate a coal-fired power plant in Kenya’s northern coastal fringes of Lamu County. A Least Cost Development Plan for power generation designed by the Kenyan government aims to raise the level in this East African nation.

In the next 40 months, starting at the end of 2015, the government expects to have reached an electricity production target of 5,000MW and increase it to 10,621MW by 2030.

In the quest to achieve this goal the Lamu Coal Power Plant was among those suggested. This coal-fired power plant is expected to generate between 900-1,000MW of power.

To attract private sector participation in this plant the model adopted for this project was Build, Own and Operate (BO&O). To this end an international tender bid was opened in January 2014.

The Gulf -Centum Consortium, which brings together Centum Investment Company, and Gulf Energy Limited, together with Chinese firms Sichuan No.3 Electric Power Construction Company Limited, CHD Power Plant Operation Company Limited and Sichuan Electric Power Design and Consulting Power Limited, won the tender.

The $2 billion tender award was granted in April 2014. Anxious moments surrounded the tender process as giving the project to Kirubi and his allies was contested.

Hebei Construction Investment Group (HCIG), a Chinese firm that had competed against the Gulf-Centum Consortium, filed a formal complaint to the Public Private Partnerships Tribunal at the Kenyan Treasury in September 2014. In January 2015 the tribunal rejected Hebei Group’s case and gave Gulf-Centum the go-ahead.

“We put in a proper bid and won the tender. Of course there were those who disagreed with our win but this was settled after due process was followed,” Kirubi says.

This was but one of the hurdles that Centum-Gulf Energy Consortium had to jump before communities’ concerns on participation as stakeholders, reservations on resettlement and compensation claims, sprung up.

“As a rule we won’t ignore the issues raised. The stakeholders are important. You go sit down with them and explain your position. The support for this project is very high all over the world,” Kirubi says. “We are trying to manage the project in such a way so that locals can get involved. We want to make sure Kenyans also benefit. We are talking to both banks and fund managers to chip in. We are going to transform the coast.”

Along the way environmental groups and activists based on the island have voiced their fears on the power plant, citing pollution and bringing in the climate change effects. But Kirubi is undeterred.

Fully aware of the challenges faced in Lamu and the grand ambitions of the Kenyan government in setting up the $24.7bn Lamu Port South Sudan Ethiopia Transport (LAPSSET) Corridor, Kirubi explains the context informing Centum’s coal-fired power plant.

“I am looking at Lamu as the next highly developed part of our country in the near future. We are happy to be the centre of LAPSSET projects. Because everything they do there will need power,” Kirubi says. “There is very little power coming from Mombasa. We are going to be the generator of power and we plan to desalinate water and supply it to the entire county. The problem of water scarcity in Lamu will be a thing of the past.”

Money games

To fully appreciate Kirubi’s acumen it is critical to trace Centum Investments’ historical heritage, political clout and economic muscle. At the same time it is also significant to understand his fixation with the youth. In many ways the dynamism of youth, which has seen Kirubi dabbling as a DJ in his own Capital FM radio station, has informed the changing paradigm influencing Centum Investments’ expansion strategy.

In its own words, Centum Investments is the “largest listed investment company in East Africa” with $1.5bn worth of assets under its management. Its current market value is estimated at $438 million.

The history of Centum Investments goes back to 1967, just as the clamour for “Africanisation” was being implemented in the newly independent state.

This “Africanisation” agenda, which was a clarion call to bring indigenous Africans to the levers of power and even business, seems to have had a strong influence on Kirubi. He speaks candidly on Africa’s path to progress.

“We need to stop exporting raw materials in mining and agriculture. Because that’s the way you create jobs, through value addition. West Africa produces cocoa [but] how come they cannot produce a bar of chocolate,” Kirubi asks. “Exporting our raw materials and importing it as finished goods is colonialism. That’s being sat on. The world must allow African countries to trade on equal terms. We cannot have some people living on the blood  and sweat of others. This colonial mentality must end.”

At the time Centum Investments was known as Industrial and Commercial Development Corporation Investment (ICDCI), an affiliate of the Kenyan government. It is in that year that it was listed on the Nairobi Securities Exchange (NSE). ICDCI became Centum Investments in 2008. Centum Investments is also listed on the Uganda Securities Exchange. A 345-acre resort city property dubbed Pearl Marina on the Galuga Peninsula is set to change Uganda’s real estate sector. Pearl Marina is a subsidiary of Centum Investments.

At present 23.8% of Centum is owned by the government of Kenya. Kirubi is Centum’s majority shareholder with a 25.1 per cent stake. He is also the chairman of Centum Investment Committee. Baloobhai Patel, Peter Kimani, Standard Chartered nominees, CFC Stanbic nominees, and USE nominees are among the main shareholders of Centum. Kiruma International Limited and International House Limited, which are owned by Kirubi, are also among the top 10 major investors in Centum.

Kirubi’s fortunes include UAP Holdings, DHL World Wide Express Limited, and Haco Brands. He has major interests in Kenya Commercial Bank, Nation Media Group and Standard Chartered Bank. 

“We need to see ourselves as customers to each other in a borderless continent but with sufficient safeguards for our people. Your best customer is always your neighbour,” Kirubi says. “It’s time to find our own solutions, open up our markets and add value to each other.”

Written By
Wanjohi Kabukuru

Wanjohi is an award-winning international environmental investigative journalist, whose specialty covers environment, geo-politics, business, conservation and the Indian Ocean marine development. Over the last 17 years Mr. Kabukuru has written extensively on energy, marine science and environmental conservation. His articles have been published in top-notch publications as African Business, African Banker, Inter Press Service (IPS), New African, BBC Focus on Africa, Mail & Guardian (South Africa), Africa Renewal, 100Reporters, and Radio France International (RFI) among numerous other publications.

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