MINISTRY OF ENERGY AND PETROLEUM

STATE DEPARTMENT FOR PETROLEUM

CONCEPT PAPER ON LIQUEFIED PETROLEUM GAS (LPG) PROJECT FOR

HOUSEHOLDS (MWANANCHI GAS PROJECT)

AUGUST 2023

DEFINITIONS
1. MoEP - Ministry of Energy and Petroleum
2. NOC – National Oil Corporation of Kenya
3. EPRA - Energy and Petroleum Regulatory Authority
4. PS – Principal Secretary
5. M&E – Monitoring and Evaluation
6. LPG - Liquefied Petroleum Gas
7. KIPPRA – Kenya Institute for Public Policy Research and Analysis
8. LPG – Liquefied Petroleum Gas

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LIST OF FIGURES..........................................................................................iii
LIST OF TABLES............................................................................................iii
1.0 INTRODUCTION........................................................................................4
1.1 Background............................................................................................4
1.2 Current Status.......................................................................................4
2.0 SITUATIONAL ANALYSIS...........................................................................8
2.1 Overview/Problem Statement..................................................................8
2.2 LPG Benefits...........................................................................................8
2.2.1 Reduced Co2 Emissions................................................................8
2.2.2 Reduced Deforestation..................................................................9
2.2.3 Low Black Carbon (Soot) Production.............................................9
2.2.4 Improved Air Quality.....................................................................9
2.2.5 Social Development......................................................................9
2.3 Concerns Towards LPG Use................................................................9
2.3.1 Safety concern............................................................................10
2.3.2 Accessibility of LPG.....................................................................10
2.3.3 Switching cost............................................................................10
2.3.4 Cost of LPG versus other fuel options..........................................10
2.4 LPG Demand and Supply..................................................................10
2.5 Legal and Regulatory Framework..........................................................11
3.0 PROPOSED STRATEGY...........................................................................14
3.1 Objective..............................................................................................14
3.2 Identification of beneficiaries................................................................14
3.3 Beneficiary requirements......................................................................14
3.3.1 Cookstoves.....................................................................................14
3.3.2 Storage and accessories..................................................................14
3.3.3 Civil Works.....................................................................................14
3.3.4 Seed Gas (consumables)..................................................................14
3.3.5 Training..........................................................................................14
3.4 Policy, Legal and Strategic Interventions...............................................15

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 3.4.1 LPG price....................................................................................15
3.5 Growing LPG demand and Infrastructure needed..................................16
4.0 PROJECT MANAGEMENT........................................................................18
4.1 Steering Committee (CS).......................................................................18
4.2 Management Committee.......................................................................18
4.3 Technical Committee............................................................................19
4.4 Secretariat and Ad-Hoc Committees......................................................20
5.0 PUBLICITY AND SENSITIZATION CAMPAIGNS.........................................21
5.1 CCG Project Publicity........................................................................21
5.2 Stakeholder Sensitization..................................................................23
5.2.1 Stakeholder Sensitization Documents.............................................23
5.2.2 Stakeholder Sensitization Meetings.................................................23
5.2.3 Managing Expectations...................................................................24
5.2.4 Legacy Issues..................................................................................24
6.0 KEY PARTNERS AND STAKEHOLDERS...................................................26
7.0 FINANCING OPTIONS..............................................................................28
7.1 GoK – Budgetary allocation...................................................................28
7.2 Grants and donations...........................................................................28
7.3 Public Private Partnerships...................................................................28
7.4 Financial Institutions/OMC’s................................................................28
8.0 CHALLENGES AND MITIGATION MEASURES..........................................29
9.0 PROJECT IMPLEMENTATION PLAN.........................................................31
10.0 MONITORING AND EVALUATION PLAN.................................................32
10.1 M&E of Project Implementation and Performance................................32
10.3 Logical Framework..............................................................................32
11.0 RISK MANAGEMENT.............................................................................35
11.1 Risk Analysis......................................................................................35
11.2 Risk Matrix.........................................................................................35
12.0 PROJECT BUDGET...............................................................................36
13.0 ROADMAP.............................................................................................38

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ANNEX 1: PUBLICITY PLAN...........................................................................39
ANNEX 2: STAKEHOLDER SENSITIZATION/AWARENESS WORKPLAN.........41
ANNEX 3: RISK MATRIX................................................................................43

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LIST OF FIGURES
Figure 1: Cooking fuel preference in learning institutions................................5
Figure 2: Monthly cooking fuel consumption/1000 students............................8

LIST OF TABLES
Table 2: Applicable legal and regulatory framework........................................10
Table 3: Challenges and Mitigation measures................................................28
Table 4: Implementation Plan........................................................................30
Table 5: M&E Plan.........................................................................................31

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1.0 INTRODUCTION
1.1 Background
Traditional biomass represents approximately 15% of total global energy use,
80% of current biomass use and helps meet the cooking needs of ~2.5 billion
people. Burning solid fuels for cooking in open fires and traditional stoves
emmits carbon dioxide and short-lived climate forcers like black and organic
carbon aerosols as well as methane. Globally, 3.8 million people die
prematurely from illnesses attributable to Household Air Pollution (WHO, 2018)
mainly due to cooking with unclean fuels and traditional cooking stoves.

The 2019 National Population Census indicate that 66.7% cook with firewood
or charcoal, which are a barrier to economic progress and a major source of
illness due to exposure to smoke in indoor settings. Only about 24% of the
households use Liquefied Petroleum Gas (LPG) as their primary cooking fuel
while the use of other clean solutions is negligible. Demand for firewood and
charcoal is a driver for deforestation which has resulted in a major climate
change due to global warming, desertification, and soil erosion, an increase in
the greenhouse gases in the atmosphere and loss of food and habitat of
animals which leads to their extinction.

Energy is undergoing a period of significant transition across the globe.

Policymakers and Industry players are making decisions over what the future
energy system will look like and how climate mitigation targets can be met
whilst ensuring that an incredibly rich and diverse tapestry of energy needs is
met. Amongst the modern fuels available today, LPG is particularly well suited
for cooking and heating uses because of its clean-burning attributes and
practical advantages over both solid fuels and kerosene. In particular, it is
more convenient, safer and cleaner. It is also highly portable and has a high
calorific value.

LPG use contributes towards the Bottom-Up Economic Transformation

Agenda(BETA)-improved access to affordable cooking, Sustainable
Development Goals-access to clean and affordable energy and supplements the
tree planting policy in the effort of afforestation. Switching from solid fuels to
LPG can, therefore, reduce deforestation and associated emissions of CO2 and
thus, bring considerable health, developmental, economic, and environmental
benefits.

The Government of Kenya through the Ministry of Energy & Petroleum (MOEP)
has been championing a revolution in Liquified Petroleum Gas (LPG) use that is

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already underway through an LPG switching programme dubbed ‘Mwananchi
Gas Project.’

The goal of the ‘Mwananchi’ LPG switching programme is to facilitate the

transition of initial 60,000 households (HH) from cooking with traditional fuels
(wood and other forms of biomass) to clean cooking with LPG.

This concept paper addresses the benefits of the project, barriers to LPG use
such as high upfront cost of cylinders and accessories and high cost of LPG. It
also provides an implementation plan and strategy on how to enhance LPG
uptake in households.
1.2 Project description
The MOEP through the National Oil Corporation of Kenya (NOCK) as its
implementing agency is championing a transition in energy use through the
Mwananchi Gas Project.

The project is structured in 2 models.

i. Model 1 - the conventional Cylinder, grill & burner model targeting an

initial 60,000 HH
ii. Model 2 - the Cylinder Smart Meter (CSM) Model targeting initial 60,000
HH - LPG use leveraging on IoT meant to mimic the behaviour of the
users to purchase and cook with LPG in small quantities as per their
disposable income at hand.
1.3 Current Status

A feasibility study was carried out in 2019 in all forty-seven (47) counties on
the type of fuel used. It was observed that firewood and charcoal are the
dominant cooking fuels in Kenya while kerosene and LPG are the least
dominant (figure 1).

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Figure 1: Primary cooking fuel use in Kenyan Households in 47 counties (GLPGP,
2019)

National Feasibility Study: LPG for Clean Cooking in Kenya

A national feasibility study done in 2019 shows that charcoal is the most
expensive type of fuel. On the other hand, LPG is cost-competitive with
kerosene and purchased firewood. This shows that LPG, a valuable cooking
solution if it is accessible and affordable.

Figure 2: Average marginal cost of cooking per household per year across
different fuels in Kenya (GLPGP, 2019)

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Model I; a successful project pilot was carried out in Machakos and Kajiado
Counties in 2017/2018 where 28,035 households benefited.

In 2017/18 FY, 220 (40 ft. HC) containers were procured by MoEP and
deployed across 38 counties at the sub-county level to be used as stock points.

In subsequent financial years, 2020/2021 and 2021/2022 MOEP procured the

following additional cylinders and accessories:

1. 60,000 Cylinders fitted with camping valves.

2. 60,000 flex rubber hoses
3. 72,000 double burner tabletop Cookstoves

Preparations towards the rollout within the eleven (11) sub-counties in Nairobi
County were done in 2022 and are complete including:

a. Appointment of distributors to undertake the distribution of sub-sized

cylinders.
b. Training of the distributors.
c. Training of all the National Government Administration Officers (NGAOs).

For operationalization of Model II, the Cylinder Smart Meter (CSM) Service
provider was onboarded towards the end of 2021/2022 financial year. A
contract has been signed between MoEP and M/S Jambo-Pay Ltd.

1. Service Level Agreement (SLA) has been prepared, reviewed and signed.
2. Pre-requisite licensing of the SLA services provider is ongoing.
3. Supply and delivery of 60,000 cylinders fitted with compact valves is
ongoing.

2.0 SITUATIONAL ANALYSIS

2.1 Overview/Problem Statement

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Climate change is of utmost importance around the globe as environmental
degradation continues to affect the world. Issues of deforestation,
environmental pollution, CO2 emissions, and Greenhouse Gas emissions
among others have become pertinent issues that need to be controlled to curb
further climate degradation. Conservation efforts/strategies need to be
developed and/ or enhanced to address emerging issues on this front.

Kenya has been affected by climate change and has experienced extreme
weather events, including increasing heat and recurrent droughts, leading to
severe crop and livestock losses, famine, displacement, and other threats to
human health and well-being. To curb climate change effects the Government
has introduced new measures to supplement the already ongoing campaigns.
One of the measures is the National Tree Growing Restoration Campaign. This
involves mobilizing the nation towards tree growth, nurturing the existing tree
cover and minimizing tree cutting by using LPG for cooking. This aligns with
the Ministry's mission: " To facilitate clean, sustainable, affordable, reliable,
and secure energy services for national development while protecting the
environment".

Household use of solid fuels (biomass fuels and coal) is the most widespread
source of indoor air pollution worldwide. Household air pollution is a leading
cause of health problems worldwide. To limit household air pollution exposure
and environmental degradation from biomass fuel use, the government of
Kenya through the Ministry of Energy and Petroleum is developing a strategy to
transition households (HH) from cooking with traditional fuels (wood and other
forms of biomass) to Liquefied Petroleum Gas (LPG) through Mwananchi Gas
Project.

2.2 LPG Benefits

LPG is an efficient, portable, clean and versatile energy source. Due to its
portability, it can be made available even in the remotest of areas. LPG
distribution can also be driven by local companies leading to the
implementation of local content policies while providing employment
opportunities to the populace.

Firewood, charcoal, LPG, and firewood were found to be commonly used as

sources of fuel in most households. However, their use and impact can vary
depending on local conditions and factors such as availability, infrastructure,
and culture. In many households, firewood was found to be more widely

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available and accessible than gas across the country. This makes firewood a
cheap, more affordable, and accessible option source of fuel. Below are the
benefits of clean cooking gas in households in the country:

2.2.1 Convenience and Reduced Co2 Emissions

Gas is more convenient than firewood since it requires less preparation time.
and produces less smoke and ash. In most households, cooking is done
indoors. LPG burns cleaner than other biomass fuels, producing less soot,
smoke, and harmful pollutants, making it a healthier and safer option for
indoor use. The International Energy Agency projects that between 800 million
to 2 billion people switching from firewood to LPG would create a net annual
atmospheric reduction of 170 - 415 million tons of carbon dioxide (ATLANTIC
CONSULTING, 2018).

2.2.2 Reduced Deforestation

Firewood is a renewable resource, but its use contributes to deforestation and
climate change impacts, as observed in recent droughts. In addition, it causes
air pollution if not harvested and burned sustainably. LPG burns more
efficiently, meaning less fuel is needed to produce the same amount of heat.
Using LPG for cooking would therefore reduce the burden of harvesting trees
for firewood, thus reduced deforestation. "Burning wood is dramatically less
carbon-efficient because wood consists of 50% fuel. The rest is molecularly
bound oxygen plus moisture. Neither of these burns and vaporizing the
moisture wastes energy. LPG, by contrast, is all fuel. Per unit of delivered
cooking heat, burning wood generates about five times the carbon of LPG
(WLPGA, 2023)

2.2.3 Reduced Maintenance Costs

LPG produces fewer emissions and pollutants when burned than firewood. The
annual maintenance costs for the kitchen are drastically reduced, such as
repainting, replacing the roof, and health care costs for the people cooking.
Overally, this can result in lower maintenance costs for households.

2.2.4 Improved Air Quality

Using firewood as a fuel source for indoor heating or cooking can lead to poor
indoor air quality, as well as the risk of fire and carbon monoxide poisoning.
LPG is a proven solution to one of the most pressing problems facing an ever
more urbanized world, as it offers a clean alternative to the burning of polluting
solid and liquid fuels. Measurements of total pollutant emissions produced by
burning wood and coal show that these fuels produce around 150 times more

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carbon monoxide (CO) than LPG, per gigajoule of energy produced. Liquid
fuels, such as kerosene, produce levels around 50% higher (WLPGA, 2023).

2.2.5 Social Development

LPG project role out will provide opportunities for businesses and Micro, Small
and Medium Enterprises (MSMEs). Its portability and moderate capital
required for distribution offers an opportunity for it to be more easily justified
in a commercial context.

2.2.6 Health impacts:

In most households, the use of firewood as a fuel has some significant health
impacts, particularly for people operating in the kitchen and exposed to high
levels of smoke and pollutants while cooking indoors. LPG is cleaner and safer
thus, reduced health issues.

2.2.7 Heat output:

Gas provides a consistent, controllable and high heat output, while firewood
may vary depending on the quality and moisture content of the wood. People
using gas spent less time cooking compared to those using firewood. Moreover,
LPG requires less transport and storage space than firewood would require.

2.3 Concerns Towards LPG Use

Attitudes and concerns about LPG, especially amongst new users, is typically
around four areas: -
2.3.1 Safety concern - is the biggest apprehension that the households will
have in converting to LPG. International experience is that this can be
overcome with a "touch and feel" awareness campaign with a strong
educational approach on safety.
2.3.2 Accessibility of LPG – availability of LPG close to households especially
in rural areas.
2.3.3 Switching cost - caused by the need to have new suppliers.
2.3.4 Cost of LPG versus other fuel options. This is the cost-to-cook
comparison among LPG, firewood, kerosene and charcoal.
2.4 LPG Demand and Supply

Kenya imports all of its Liquefied Petroleum Gas (LPG) requirements. The Total
Demand as of 2021 is estimated at 370,000 tons compared to 2020 which was
326,000 tons representing a growth of 13.8% per annum. According to a
Petroleum Development study report published in June 2013, the demand was

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estimated to be 333,000 tons in the mid-case and 735,000 tons in the high–
case consumption. The current demand has demonstrated that the country is
headed to the high optimistic consumption case despite the existing bulk
import bottlenecks.

On the supply side, there exist two bulk import jetties (via vessels) all located
in Mombasa. There also exists import of LPG via roads (trucks) from
neighbouring countries i.e., Tanzania and Zambia. Details of the bulk LPG
import facilities through Mombasa are as follows: -
1. The first is through the Shimanzi Oil Terminal (SOT) jetty which is
connected to storage facilities owned by private Oil Marketing
Companies (OMCs). These facilities are located at Shimanzi and
Changamwe with a combined storage of 1,600 tons. SOT jetty is also
connected to another storage located at a government-owned entity
i.e., Kenya Petroleum Refineries Limited (KPRL), Changamwe tank
farm with a storage of 1,100 tons. Thus, the total storage capacity of
the terminals connected through the SOT jetty is 2,700 tons.

2. The other terminal privately owned is linked to African Gas and Oil
Limited (AGOL) company located in Miritini with a total storage of
25,000 tons and is connected to a jetty operated by AGOL.

The LPG through these facilities is imported privately in parcels of approx. 800
to 3,500 tons at the SOT jetty and 20,000 tons through the AGOL jetty. The
LPG is discharged into these terminals where the gas is bottled and loaded into
trucks for delivery into the various localities.

The KPRL facility although stores the gas does not have a truck loading or
bottling facility. Thus, gas received here is then delivered to OMC's owned
terminals located in Changamwe or Shimanzi for distribution. This results in
double handling which contributes to the high cost of the LPG.

For the inland market, the LPG is loaded onto trucks and wagons, all licensed
by Energy and Regulatory Authority (EPRA) and transported to inland LPG
bottling and filling plants where it is refilled into the LPG cylinders of various
sizes i.e., 6 kg, 13 kg and 50 kg.

LPG to the end user is also delivered by way of trucks for those that have bulk
storage i.e., hospitals, hotels, schools etc.

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2.5 Legal and Regulatory Framework
The following legal and regulatory framework is in place for the regulation of
LPG.
Table 1: Applicable legal and regulatory framework
FRAMEWORK
Petroleum Act (2019)
Liquefied Petroleum Gas
Regulations (2019)
Energy Act (2019)
Other relevant laws
FUNCTION
The Petroleum Act, 2019 was enacted to
consolidate into one statute the laws relating
to petroleum value chain. Previously, the
upstream petroleum industry was regulated by
the repealed Petroleum (Exploration and
Production) Act, 1984 (repealed) while
midstream and downstream operations were
regulated by the Energy Act, 2006 (repealed).
The Act stipulates the licensing requirement
for refining, importation, export, bulk storage,
transportation, wholesale, and retail of
petroleum products.
The Regulations provide guidelines for
licensing Importation of bulk LPG, storage of
bulk LPG, transportation, refilling, retailing,
reticulation, reporting and investigation of
incidents and association among the players.
Currently, the imports are privately
coordinated with minimal involvement by the
Government.
It established the Energy and Petroleum
Regulatory Authority ("EPRA"). EPRA regulates
the whole energy sector, including electricity,
petroleum/LPG, renewables and other forms of
energy, except for licensing of nuclear
facilities.
Other relevant Kenya laws that directly and
indirectly impact LPG operations and
maintenance include:
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FRAMEWORK FUNCTION
 The Environmental Management and
Coordination Act, 1999.
 The Occupational Safety and Health Act,
2007
 The Weights and Measures Act, Cap 513
 The Standards Act, Cap 496
 Cylinder Exchange Pool- Supervises
interchange of, and financial settlement
for, cylinders of each licensed Marketer
collected amongst all the others; was
mandatory and will become optional
upon enactment of the revised LN 121
 Competition Act No. 12 of 2010
Promotes and protects competition
Standards - KEBS In addition to the Acts and Regulations, LPG
operations must adhere to standards set out
by KEBS (which is established under the
Standards Act, Cap 496). The key standards
relating to LPG are:
 LPG Product:
o KS 91 Specification for LPG
product.
 LPG Storage and Handling:
o KS 1938-1: 2006 Code of practice
for handling, storage and
distribution of LPG in domestic,
commercial, and industrial
installations for capacity not
exceeding 3,000 L.
o KS 1938-3:2006 Code of practice
for handling, storage and
distribution of LPG in domestic,
commercial, and industrial
installations for capacity exceeding
500L.

International Standards API Standard 2510

Design and construction of LPG installations.

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FRAMEWORK FUNCTION

ISO 10497
Testing of valves – fire types-testing
requirements.

ISO 12162
Thermoplastics materials for pipes and fittings
for pressure applications- classification,
designation, and design coefficient.

ISO 12176
Plastics pipes and fittings – equipment for
fusion jointing polyethylene systems – part 1:
Butt Fusion.

ISO 17292
Metal ball valves for petroleum, petrochemical
and allied industries.

ISO 9000
Quality management systems- fundamentals
and vocabulary.

ASME code- Section VIII

construction code for design, manufacturing,
inspection, and testing of pressure vessels and
covers.

LPG Licenses Each of the key elements of the supply chain

from importation to retail are licensed by
EPRA.

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3.0 PROPOSED STRATEGY
3.1 Strategic Objectives
The strategy is to enhance LPG penetration and increase LPG per capita consumption from
the current 7.5 kg per year to 15 kg per year and enhance its penetration from approximately
24% currently to 70% by 2028. The realization of the strategy is envisaged through the
following four broad objectives and key interventions which are in line with Kenya Kwanza
Manifesto and Bottom-up Economic Transformation Agenda.

1. Transition 50% of all the households from use of biomass cooking fuels to LPG by
2028

Key Interventions

i. Distribute 300,000 cylinders, grill and burner equitably across the 47 counties every
year for the next 5 years.

ii. Distribute 100,000 Cylinder Smart Metering (CSM) solutions that leverage on IOT
equitably across select 10 urban counties every year for the next 5 years.

iii. Champion and promote the use of LPG as a cooking solution among the rural and
urban poor through various media platforms.

iv. Empower communities especially women, the vulnerable and youth to adopt/acquire
LPG as a clean cooking solution through various financing options. (LPG-Promotion via
Microfinance).

2. Support the private sector players in providing goods and services across the LPG
value chain

Key Interventions

i. Encourage the private sector to invest in local cylinder manufacturing and revalidation
plants.

ii. Enforce standards in the design and manufacture of LPG cylinders to ensure their
safety.

iii. Support and encourage the youth, private sector, and institutions of higher learning in
innovative solutions such as smart metering and cylinder tracking management
systems.

iv. Addressing barriers to LPG use through discounting the upfront cost of the hardware
(Cylinder, grill and burner) while capturing a proposed roadmap with emphasis on
conversion, scalability and sustainability.
3. Support the Ministry of Environment and Forestry in the reduction of the rate of
deforestation to achieve the country’s ambition of 30% national tree cover by
2032
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Key Intervention

i. Mobilise OMCs, IOCs and other petroleum sector players in planting 1,000,000 trees
every year for the next 5years in their areas of operation and other designated areas.

The objective of the Mwananchi gas project are:

i. Reduction in the use of wood fuel, charcoal and kerosene and consequently reduction in
respiratory diseases and mortality rates associated with household air pollution
ii. Reduced deforestation and consequently conserving the country’s forest cover
iii. Making clean cooking fuel (LPG) readily available
iv. Reduction of biomass, kerosene and other forms of unclean fuels for use as primary
household cooking fuels, which have negative impact on the environment, health and
sustainable economic development in line with the BETA .

3.2 Criteria for identification of Beneficiaries

The beneficiaries of the project will be low-income households across the country. The Kenya
Institute of Public Policy Research and Analysis (KIPPRA) was engaged to assist MOEP develop
an effective roll-out plan with emphasis on the development of vetting criteria for identifying
targeted households for which the LPG for households (‘Project’) is intended.

During the engagement KIPPRA:-

1. Developed a comprehensive eligibility criterion in order to ensure the discounted

cylinders only go to deserving beneficiaries.

2. Advised on Target priority counties for roll out within the Country based
combined charcoal and kerosene consumption as shown in table 2. The report
ranked counties based on percentage household (%HH) on combined
consumption of Charcoal and Kerosene. The top-6 priority counties are:
Table 2: Top six priority counties for LPG beneficiaries

# County (%) HH on Combined Number of Households

Charcoal & Kerosene (000)

1 Mombasa 66.7 378

2 Kisumu 57.7 300

3 Nairobi 52.3 1,506

4 Nakuru 41.5 616

5 Kiambu 36.8 795

6 Narok 29.6 * 241

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 *Charcoal only

3. Defined a registration tool for gathering data on eligible households by local

administration.

4. Mapped out all the counties in Kenya based on the average household spend on
energy, combined charcoal & kerosene usage, a matrix of poverty levels &
disposable income to guarantee ability to refill gas or other appropriate criteria
and rank them according to need in order to inform the project roll out plan.

Table 3: Number of households Identified to benefit from LPG for household project based on
usage of Kerosene and Charcoal

County Percentage of No. of No. of Prorated

households Households Households Cylinder
using Kerosene per County for LPG Distribution
(K) and (K+C) (K+C)
charcoal (C)
Mombasa 378,422 15,068
66.7 252,407
Kisumu 300,745 11,975
57.7 173,530
Nairobi City 1,506,888 60,000
52.3 788,102
Tana River 68,242 2,717
43.3 29,549
Nakuru 616,046 24,529
41.5 255,659
Uasin Gishu 304,943 12,142
41.0 125,027
Isiolo 58,072 2,312
38.1 22,125
Kajiado 316,179 12,589
38.1 120,464
Kilifi 298,472 11,884
37.4 111,629
Kiambu 795,241 31,664
36.8 292,649
Garissa 141,394 5,630
36.4 51,467
Narok 241,125 9,601
34.5 83,188

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Lamu 37,963 1,512
33.9 12,869
Taiat/Taveta 96,429 3,840
31.9 30,761
Laikipia 149,271 5,944
31.6 47,170
Machakos 402,466 16,025
30.9 124,362
Nyeri 248,050 9,877
26.0 64,493
Samburu 65,910 2,624
23.7 15,621
Siaya 250,698 9,982
23.6 59,165
Trans Nzoia 223,808 8,911
22.6 50,581
Nyandarua 179,686 7,155
20.9 37,554
Kwale 173,176 6,895
19.9 34,462
Turkana 164,519 6,551
19.6 32,246
Baringo 142,518 5,675
18.2 25,938
Kirinyaga 204,188 8,130
18.1 36,958
Makueni 244,669 9,742
17.9 43,796
Homa Bay 262,036 10,434
17.8 46,642
Mandera 125,763 5,008
17.2 21,631
Meru 426,360 16,976
15.6 66,512
Kericho 206,036 8,204
15.2 31,317
Kisii 308,054 12,266
14.6 44,976
Migori 240,168 9,563
13.3 31,942

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 Busia 198,152 7,890
13.1 25,958
Kakamega 433,207 17,249
12.8 55,450
Embu 182,743 7,276
12.6 23,026
Marsabit 77,495 3,086
12.4 9,609
Nyamira 150,669 5,999
11.8 17,779
Kitui 262,942 10,470
11.5 30,238
Bungoma 358,796 14,286
10.6 38,032
Murang'a 318,105 12,666
10.5 33,401
Elgeyo/ 99,861 3,976
Marakwet 10.0 9,986
Tharaka-Nithi 109,860 4,374
9.3 10,217
West Pokot 116,182 4,626
8.0 9,295
Nandi 199,426 7,941
6.9 13,760
Vihiga 143,365 5,708
6.8 9,749
Bomet 187,641 7,471
3.5 6,567
Wajir 127,932 5,094
2.1 2,687
12,143,913 3,460,548 483,536
Source: Kenya Population and Housing Census (KNBS, 2019)

3.3 The LPG Distribution Plan

Step 1: Selection of the priority Counties for Roll out

Counties were selected based on percentage household (%HH) on combined consumption of

Charcoal and Kerosene with top six counties six counties in table 2 given the first priority.

Step 2: Identify roll out area(s) within any County

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The rollout area(s) within a county will be done in the Sub-counties identified during the
implementation stage. The National Government Administration Officers (NGAO) and
Community based Organizations (CBOs) will

play an important role in identifying (area(s) to be selected for roll out based on the following
characteristics:-

 High population density with low use of LPG

 Reasonable size of disposable income

 Poorly developed LPG distribution infrastructure

 Accessibility to the LPG supply point

 High charcoal and kerosene consumption

The identification of deserving households will be cascaded from the national level to local
administration level (Nyumba Kumi) within the major towns to villages in the rural areas

The local administration will be engaged to:-

1. Provide a list of eligible beneficiaries - Carry out beneficiaries’ identification

2. Facilitate in sensitization of the Mwananchi programs.

3. Assist Distributor(s) and Management in follow up program in order to ensure the

discounted.

Step 3: Map identified Area (Sub-County).

 Demarcate the area into smaller territories.

 Recruit distributors to manage a specific territory.

 Where applicable assign existing containers to distributors

Step 4: Provide market support.

 Provide marketing support for continuous sensitization and education to the target
market.

 The price shall be guided by Project Implementation Team and approved by the Project
Manager(s) based on prevailing market prices.

 Project Implementation Team shall do project activation and safety awareness through
road shows, public barazas, local media and/or religious gatherings (NGAO shall be
engaged to get the buy-in and benefit from increased publicity).

 Train end users from the onset on the safety and proper use of LPG equipment.

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Step 5: Implement an efficient supply plan.

 Points of sale shall be stationed at strategic locations within the identified area during
the mapping in stage 3.

 NOCK shall ensure an adequate supply of LPG.

 The transporters (delivered mode) or distributors (own collection mode) shall replenish
the containers from the filling plant.

 NOCK shall have a delivery schedule that ensures no stock out at the points of sale.

Step 6: Recruit and assign a distributor.

 The distributor to be recruited based on eligibility criteria

 The distributor to supply and deliver LPG to the already identified beneficiaries and
facilitate refills.

 The distribution team shall monitor the market impact.

 Ensure close distributor market support through the provision of Point of Sales (POS),
Promotions and market activations.

 Monitor and evaluate distributor performance based on set targets.

Distribution Model

PROPOSED NOCK DISTRIBUTION STRUCTURE

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Figure 1: Distribution model for the Mwananchi Gas Project

Proposed Roll Out of 60,000 Cylinders within Nairobi City County based on prorated and
straight line method
Cylinder Distribution
Nairobi City (Sub-
Counties) Households Pro-rated Straight line

Dagoretti 155,089 6,175 5,455

Embakasi 347,955 13,855 5,455

Kamukunji 84,365 3,359 5,455

Kasarani 271,290 10,802 5,455

Kibra 61,690 2,456 5,455

Lang'ata 62,239 2,478 5,455

Makadara 70,361 2,802 5,455

Mathare 74,967 2,985 5,455

Njiru 204,563 8,145 5,455

Starehe 69,389 2,763 5,455

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Westlands 104,980 4,180 5,455

1,506,888 60,000

The roll out will begin from Nairobi City County and then to six priority counties identified for
initial distribution. Roll out will proceed to other counties based on the criteria already
formulated by KIPPRA.

3.4 Training

Identified distributors, CBOs, NGAO, national and local government administrative officers
will be trained in LPG handling, fire safety and firefighting.

3.5 Policy, Legal and Strategic Interventions

Currently LPG uptake is hindered by the high cost of entry. This cost includes the hardware
costs (cooking equipment & the LPG supply equipment) and the cost of LPG gas. The strategic
and policy interventions should address the cost of entry and eliminate this barrier. The
following are the proposed policy, legal and strategic interventions.

S/No Issues Interventions

identified
1. LPG prices 1. Having long-term Government to
Government framework.
2. Introduce LPG OTS system. Going by the
White Oils, OTS is competitive and is thus
expected to bring down the LPG price.
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 Availability of LPG storage facilities and a
CUM at a Government owned entity are
key components in the successful
introduction of LPG OTS. Importation of
LPG through OTS will require policy and
legal intervention.
4. Illegal LPG Enforcement of regulations to avoid illegal
refills supply refilling and unlicensed LPG
dealers/sales

3.6 LPG PRICE

LPG is expensive in Kenya relative to the cost of competing fuels. No recent analysis has been
done to persuade Kenyans of the energy cost efficiency of LPG. In 2013 the cost of one year of
cooking with LPG (approximately $350) was much higher than the cost of cooking with
kerosene ($200) or coal ($150). In 2017, kerosene (inclusive of value-added tax, VAT) was still
cheaper than LPG (which is now zero-rated from VAT), (Live Wire 2019/89, 2019).

In Kenya OMCs come together and coordinate the import of LPG (through the SOT jetty)
otherwise the larger parcels are imported through the AGOL jetty. LPG is not among the
petroleum products regulated by EPRA thus the importer determines the price of the LPG
based on their importation costs. The landed cost of the LPG is determined by:

(i) Landed cost i.e., Cost, Insurance and Freight (CIF), The Cost here refers to the
Global Reference Price. Because the LPG is privately imported, there is no
standard applied reference marker.

(ii) Landing costs (wharfage, maritime levy, certification costs, surveyor costs etc.

(iii) Hospitality charges

(iv) Bulk transport

(v) Taxes

(vi) Bottling or filling charges

(vii) Return on investment (margins)

3.6.1 Consumer Price

Several factors contribute to the high consumer price. Apart from fluctuations in the
international import price, the landed supply cost is persistently high owing to the absence of
an open tender system (OTS) for bulk storage of LPG, and the margins retained by dealers,
Page 25 of 66
distributors, and retailers are unusually high. To this, must be added the substantial costs
consumers pay for their cylinders, and accessories needed to use the gas.

Price Element Description

Importer Price Price charged to marketers by importer ex-Mombasa

(Mombasa)

Bulk Transport Cost Cost to transport LPG in bulk from Mombasa to the
(Nairobi) Nairobi area

Bulk Transport Margin obtained by the bulk transporter

Margin

Transport Loss loss factor percentage, borne by the Marketer

Cylinder Filling Cost Cost to fill cylinder (based on 6kge size)

Cylinder Cost of maintenance of the cylinder

Maintenance Costs

Depot Loss loss factor percentage, borne by the Marketer

Marketer Margin Margin obtained by the Marketer

Local Cylinder Cost to transport cylinders within the service area of

Transport Cost the filling plant

Distributor Margin Margin obtained by the distributor

Retailer Margin Margin obtained by the retailer

Net Cylinder Cost to transport cylinders to a representative remote

Transport Cost community
(Nyeri)*

Total (Nyeri area) * At 150 km from greater Nairobi

Home Delivery Price charged by third-party services that collect

Charge consumers' empty LPG cylinders, take them to cylinder
exchange points, and return with filled cylinders

The price is a moving number and is dependent on the international LPG price, and the
source at the time of loading any given consignment destined for Kenya. Due to the small
parcel sizes, it is likely that the LPG is transhipped from the bulk carriers to the smaller
vessels suppling to the Kenya market.

3.7.1 Proposed Mwananchi Pricing Structure

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Table 4: Pricing structure 1

Mwananchi Gas Pricing Structure

Kg 6Kg

Cost of Gas (VAT Incl.) 141.52 849

Overheads/
Distribution Cost 17.8 107

Gross Margin 23 138

Price to the
Distributor 1,094

Distributor Margin 15 90

Price to Retailers 1,184

Retail Margin 15 90

Price to Consumers Gas 1,274

Cost of Cylinder @2183 Cylinder 489

Cost of Cookstove @
386.64 Cookstoves 97

Cost of Hosepipe @
243.33 Hosepipes 90

Selling Price to
Consumers 1,950

Table 5: Pricing Structure 2

Actual
Cylinder Discounted Gas
Item Cost Price price Comments

Cylinder 2,221 747 (35% of the initial)

**

Prevailing Market
Gas Refill 1,140 Price

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Burner 387 131 (35% of the initial)

Grill 243 82 (35% of the initial)

Total 2,851 960 1,140 2,100

NB** Cost of Gas is currently at 141/Kg

Due to limitations in storage capacity (in Mombasa) and because LPG importation is not
among the regulated petroleum products (by EPRA), the product does not enjoy economies of
scale i.e., the import is not done centrally through the Open Tender System (OTS). There is
also limited and fragmented inland storage capacity that further hinders importation of larger
LPG cargoes. Besides, all the LPG is transported inland via road in smaller parcels i.e., trucks.

With an annual total LPG demand of 370,000 tons in 2021 and applying a linear growth of
13.8%, the current estimated annual demand is 421,000 tons. This translates to a monthly
demand and thus import of approximately 35,100 tons which is 1.27 times the current
storage capacity in Mombasa (27,700 tons). If all this monthly demand was imported through
Mombasa, there would still be attendant costs of vessel shifting (2 jetties) and demurrage
(vessel would have to wait for ullage creation). All these factors would contribute to the high
cost of LPG.

In view of the above, additional storage capacity both at the coast and inland is required to
lower the cost of the LPG. So far, the Government has taken a positive step in improving the
LPG handling facilities by the inclusion of LPG handling through the new KOT jetty (KOT II).
KOT II can handle a vessel of up to 100,000 tons of product and is connected by a 24"
pipeline, whose discharge flow rate is 2,500 M 3/hr. However, there lacks a Common User
Manifold (CUM) at the Beach Valve Station (BVS).

Policy, legal and strategic interventions should address the availability, affordability, and
sustainability of the LPG. So far, all LPG imported through the country is imported privately.
Some of these interventions include: -

1) Improved LPG infrastructure i.e., increased storage capacity at Government owned

facilities thus the KPC Bulk LPG Project should be fast-tracked. With enhanced
storage, the LPG can be imported in larger cargo sizes thus enjoying economies of
scale. Government can also encourage investment in LPG infrastructure through the
private sector.

2) Availability of Common User Manifold (CUM) at the Beach Valve Station at Kipevu.

3) Affordability of LPG- Bringing down the LPG prices by optimizing the components
of the LPG cost.

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 4) Introduce LPG OTS system. Going by the White Oils, OTS is competitive and is
thus expected to bring down the LPG price. Availability of LPG storage facilities and a
CUM at a Government owned entity are key components in the successful
introduction of LPG OTS. Importation of LPG through OTS will require policy and
legal intervention.

5) Enforcement of regulations to avoid illegal refilling and unlicensed LPG dealers.

3.7 Growing LPG demand and Infrastructure needed.

To meet the current and growing LPG demand and Infrastructure needed, the following
strategy interventions are required:

i. Construction of Bulk Import facilities that include additional storage capacity,

Common User Manifold, Truck Loading and Bottling Facility at KPRL.

ii. Construction of Bulk storage, bottling and truck loading facilities inland. Ideally,
these facilities should be located in areas where demand is concentrated.

iii. Ensure efficient and least-cost transportation of LPG from import handling
facilities to the inland market. Currently, all LPG is transported inland via road
(trucks). Consider using rail which will require wagon handling facilities at the receiving
LPG terminals.

iv. Construction of an LPG Pipeline - Consider an LPG pipeline to transport the LPG from
Mombasa to the inland e.g., Nairobi. Transportation by pipeline is cheaper than road or
rail in view of the high volumes and reduced multiple handling.

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 4.0 PROJECT MANAGEMENT
4.1 Steering Committee (LPG)
The Committee will comprise of Cabinet Secretary for: -
 Ministry of Energy and Petroleum – Chairing
 NOCK – National Oil Corporation of Kenya
 EPRA - Energy and Petroleum Regulatory Authority
 National Treasury and Economic Planning
 Ministry of Interior and National Administration
 Attorney General
 KPC-Kenya Pipeline Company

Committee Chair Role

Steering Cabinet Secretary -  To provide overall leadership for the

Committee Ministry of Energy project.
and Petroleum  To provide policy direction for the
project.
 To align priorities of the project with
Kenya Kwanza objectives at the
national level.
 To present Cabinet Memos on the
progress of the project.
 To coordinate with other CS's of
relevant Ministries on issues
requiring policy decisions (Ministry of
interior, National Treasury, AG's Office,
and other Ministries on a need basis).
 To inform Cabinet and National
Assembly on project updates and
resolutions.

4.2 Management Committee

The Committee will comprise of Principal Secretary for: -

 State Department for Petroleum

 State Department for Energy

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 State Department for Internal Security and National Administration
 NOCK
 EPRA

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 Committee Chair Role

Management Principal Secretary –  To provide stewardship of the

Committee State Department for project.
Petroleum  To coordinate the budgetary
requirements of the project.
 To liaise with other heads of
relevant MDA's on project issues.

4.3 Technical Committee

The Committee will comprise of members from the following agencies: -

1. MoEP (7)
2. KPC (1)
3. NOCK (4)
4. KPRL (1)
5. EPRA (1)
6. NEMA (1)

Committee Chair Role

Technical Commissioner for  Administer specific project issues.

Committee Petroleum  To provide technical expertise for
the project.
 To coordinate various activities
undertaken by the project.
 To p repare project work plans and
procurement plans.
 To advise the Principal Secretary
on project milestones.

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4.4 Secretariat and Ad-Hoc Committees

Committee Chair Role

Secretariat Senior Technical Officer -  To provide Secretariat services at all

SDP meetings at all levels.
 To coordinate activities of the other
committees.
 To ensure there are always open
and clear channels of
communication.
 To ensure timely availability of
relevant presentations and
documents.
 To generate and circulate the
agenda of the various committee
meetings.
Ad-hoc Relevant appointed To be formed as and when need arises.
Committees officers

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 5.0 PUBLICITY AND SENSITIZATION CAMPAIGNS
5.1 LPG for Household Project Publicity
5.1.1 Objectives
a. Raise awareness: Raise household understanding of the
benefits of utilizing LPG as a clean cooking fuel choice.
b. Behaviour change: Using targeted messages, encourage
households to switch from traditional cooking fuels to LPG.
c. Safety education: Educate users on proper LPG handling,
storage, and use to avoid accidents and guarantee a smooth
transition.
d. Inclusivity: Ensure equal access to information and LPG
resources for vulnerable and marginalized populations.

5.1.2 Methods of Publicity

The Publicity Plan in Annex 1 highlights LPG for household

project publicity, which will be accomplished through the
following strategies:

i. Dissemination of Flyers, Booklets and Circulars

The documents will be distributed to target households in all

counties, with the county government and administration
serving as the primary point of distribution. They will also be
distributed in various CBD outlets and forums for wider
dissemination.

ii. Advertising on Billboards and LCD screens

Billboards and LCD screens within County headquarters’ major

roads e.g., the one at Haile Selassie Roundabout in Nairobi can
be hired for a period of time during the launch of the campaign
to create awareness of the campaign.

iii. Playing Video clips on investors forums, National television Ads

and audio clips on National radio stations.

The Kenya Film Service (KFS) will be engaged to develop content

for the campaign.

iv. Scheduling Interviews and Talk shows.

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 Interviews will be arranged with the various TV and Radio
stations where the CS Petroleum, PS Petroleum, and their
counterparts in the County government will give information on
the project as well as updates on the project status.

v. Adverts in local and international digital and print media.

Publicities, short interviews, and related programs will be run

on TV and Radio. Periodic adverts will also be run in both
mainstream and peripheral digital and print media including
mainstream newspapers and the Ministry's’ website.

vi. Product demonstrations

LPG infrastructure will be demonstrated in homes and community

centres to explain how they may be used safely and efficiently.

vii. Having Ads on Social media channels

Twitter, Instagram, Facebook, Snapchat, YouTube will be used

to advertise and provide information on the campaign.

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 5.1.3 Key local and international media to be used:
a) Local media:
Newspapers and Magazines:
 The Standard Newspaper
 The Daily Nation
 The Star Newspaper
 Business Daily
 Taifa Leo
 MyGov Newspaper
 Petroleum Insight Magazine
Websites:
 Ministry of Energy and Petroleum
 County Governments respective websites
 NOCK
 EPRA
 NEMA
TVs:
 KBC
 Nation TV
 Citizen TV
 KTN
 K24
 Ramogi TV
 Kameme TV

b) Regional and foreign media:

 BBC Swahili
 The East African
 The Economist
 Business Africa
5.1.4 What message should be included in the publicity programs and
interviews?
 The Government's efforts towards mitigating climate change
and deforestation.
 Benefits of using LPG compared to the Biomass.
 Objectives of and status of the LPG campaign
Page 36 of
  Opportunities that will be created by the campaign, including
employment opportunities.
5.2 Stakeholder Sensitization
As the Government develops a communication strategy for the
campaign there is a need for stakeholders to identify that the project is
a government project and not an investor project. There is therefore a
need to develop strategies and activities that are coordinated by the
Government. The strategy needs to be carried out in three broad areas
namely:
1. Stakeholder Sensitization
2. Managing Expectations, and
3. Handling Legacy Issues
This will also involve the dissemination of information about the LPG
project to every county, OMCs, relevant ministries, agencies, and other
stakeholders. This leads to an informed populace which in turn leaves
very little room for speculation, rumours, and misinformation. The
stakeholder sensitization
plan is set out in Annex 2 and the activities to be carried out include:
5.2.2 Stakeholder Sensitization Documents

Developing reading materials with information on various aspects of the

campaign. The documents to be developed are:

a. LPG Campaign – the document to include information about the

Project; Project Objectives; Project background; Project activities;
Project milestones and expected achievements as well as project
future plans.
b. The Petroleum (Liquefied Petroleum Gas) Regulations, 2019; Legal
Notice No 100– create a better understanding of the regulatory
regime that governs the downstream LPG industry.
c. Other Documents – the document should focus on a summary of other
activities carried out by the State Department for Petroleum to
create awareness of the functions of the Ministry of Energy and
Petroleum, and specifically the State Department for Petroleum.

5.2.3 Stakeholder Sensitization Meetings

Sensitization meetings will be held with the following key stakeholders.

a. Ministries, Departments and Agencies (MDA's).
b. County Government leadership

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c. County and subcounty Administration
d. Selected stakeholders in the Sector
e. Oil Marketing Companies (OMC's) and private investors.
f. Target households

Page 38 of
5.2.4 Managing Expectations

Managing expectations is a critical component of

developing sensitization programs. The public and
stakeholders must have a clear and concise
understanding of the project and its benefits. Full
disclosure of the project prevents unscrupulous
individuals from spreading misinformation, as their
audience will already be aware of the project. One of the
main issues that needs to be addressed is the mandate
and responsibility of the national government and the
various agencies involved in the project. The project
management framework will be fully explained to all
stakeholders to ensure that they understand what to
expect from the government and each other throughout
the life of the project.

Strategies to be employed to manage expectations include:

i. Develop and standardize information to be shared

and disseminated through sensitization meetings
arranged and selected media.

ii. Develop a monitoring and feedback mechanism for

continuous project improvement.

iii. Provide training on how to use LPG safely. LPG is a

flammable gas, so it is important to train households
on how to use it safely. This training should cover
topics such as how to inspect and maintain LPG
cylinders, how to prevent leaks, and what to do in
case of an emergency.
iv. Celebrate successes. When the project reaches
milestones, take the time to celebrate with the
community. This will help to build trust and promote
continued support for the project.
v. Be flexible. Things don't always go according to plan,
so be prepared to adjust the project as needed.
vi. Developing a dispute resolution Mechanism.

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5.2.5 Legacy Issues

Legacy issues are an emotive subject with stakeholders.

The project has been plagued by challenges and there is
therefore a need to not repeat the same mistakes. The
lessons learnt in the project form important input for the
current approach. Legacy issues lead to a lack of trust and
disbelief and a lack of buy-in from stakeholders.

Strategies to be employed to manage expectations include:

i. Collate the issues that have been identified as

challenges in the past, understand why they
happened, and develop possible mitigation measures
to address them.
ii. Encourage information sharing with relevant
stakeholders, always assuring them that these
issues are being addressed.
iii. Communicate promptly on any new developments
assuring stakeholders of the Government's
commitment to addressing their concerns.

iv. Monitor and evaluate the project. It is important to

monitor and evaluate the project to ensure that it is
on track and that the goals are being met. This will
help to identify any problems early on and make
adjustments to the plan as needed.

v. Develop collaborative efforts with all stakeholders

geared towards their involvement and ownership.
vi. Organize meetings with different stakeholders.
vii. Develop a monitoring and feedback mechanism for
continuous project improvement.
i.

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6.0 KEY PARTNERS AND STAKEHOLDERS-
The following stakeholders have been identified: -
AGENCY
Ministry of Energy and
Petroleum
Ministry of Interior and National For the success of the project, National
Administration
Parliament (Energy Committee, Allocation
Education Committee)
County Governments
National Oil Corporation of
Kenya (NOCK)
Energy and Petroleum
Regulatory Authority (EPRA)
Energy Safety Net (ESN)
ROLE
It is in charge of the LPG industry's overall
strategic and policy direction. As per
Executive Order No. 1 of 2023 one of the
key functions of the Ministry is "Petroleum
Products, Import/Export/Marketing Policy
Management".
Government Administration Office (NGAO),
would be required to act as a focal point in
government operations in regard to the
project and offer guidance on overall
security
of funds for project
implementation; project oversight.
The County Government, could act to
improve participation in stakeholder
engagement at the county level.
NOCK has been delegated by the Ministry
to support the development and operation
of LPG filling plants; distribution of LPG
cylinders equitably across the 47 counties.
The responsibility of NOCK is stabilizing
the petroleum supply market by
participating in all aspects of the
petroleum industry i.e., upstream,
midstream and downstream activities.
EPRA licenses and regulates all the key
players in the industry.
is an umbrella term for government-led
approaches to support very poor and
vulnerable people to access essential
modern energy services, defined as
electricity and clean fuels and technologies
for cooking, by closing the affordability gap
between market prices and what poor
customers can afford to pay.
Page 41 of 66
AGENCY ROLE
Kenya Bureau of Standards KEBS enforces the various product and
(KEBS): equipment standard for LPG Mwananchi
Gas.
National Environmental NEMA is the government agency
Management Authority of Kenya responsible for the management of
(NEMA) environment and environmental policy.

Page 42 of 66
7.0 FINANCING OPTIONS-

The following financial options can be considered for the project.

7.1 GoK – Budgetary allocation
There is a case to be made for some of the project expenditures to be paid for
by the government using exchequer. Through this, the government will
minimize the use of kerosine and wood fuels, promote use of clean energy, and
minimize environmental degradation and health hazards associated with the
use of kerosine and wood fuel as source of energy.

7.2 Subsidies and Grants

The government would provide a subsidy on the initial cost of the cylinder and
ensure development of last mile distribution channels where the distribution
model involves working with at least one distributor per sub-county. Therefore,
there is a necessity for the government to subsidize on the initial cost of the
cylinder and making a grant to fund the project.

7.3 Public Private Partnerships

Over time, the Public Private Partnership (PPP) framework has allowed the
Kenyan government to carry out top-notch infrastructure projects. The project
entails constructing of mini-LPG storage and refilling plants across the country
which can be built using this framework.

7.4 Private Sectors and Financial Institutions

This can be accomplished by persuading financial institutions to support the
private sector players in LPG cylinder manufacturing, key hardware
manufacture and innovative solutions in the LPG value chain.

Page 43 of 66
8.0 CHALLENGES AND MITIGATION MEASURES
The table below outlines challenges that may be encountered by the project
and proposed mitigation measures.
Table XXX: Challenges and Mitigation measures
S/No Challenges Proposed Mitigations Measures
1. Lack of funds to support 1.Fast track budget allocations to
the rollout and secure funding by working closely
implementation of the with relevant government bodies.
project. 2.Source for funding through
The project will require huge grants and donations.
capital to invest in the 3. Encourage/allow private sectors
infrastructure and to participate in the projects so
distribution. that they can provide funds.
2. Corruption 1. Emphasis on transparency and
Corruption will affect project accountability during project
implementation, quality of implementation.
material used, cost and time 2. Ensure strict adherence to the
taken to complete. procurement laws and
regulations.
3. Inadequate LPG imports 1. GoK to encourage LPG
and storage facilities Companies to Invest in LPG
LPG imports into Kenya are import and storage facilities.
through the Shimanzi Oil 2. KPC to develop its own bulk
Terminal (SOT) in Mombasa import facility.
which has a capacity of 3. Develop regulations to compel
around 2500 tons. In LPG facilities to be Common User
addition, SOT has a facility.
congestion which caused
delays.
The facility is privately
owned and linked to African
Gas and Oil Limited (AGOL)
company located in Miritini
with a total storage of
25,000 tons and is
connected to jetty operated
AGOL.
4. Inadequate LPG GoK to encourage LPG Companies to
distribution infrastructure invest in LPG distribution and supply.

Page 44 of 66
 that may affect supply and
sustainability.
Some households are in
areas without LPG
distribution infrastructure.
5. Competition from the 1. Gradually build brand
market awareness over months.
Competition from the 2. Partnering with the existing
existing brands in the brands in the markets.
markets
6. Financial constraints Establishing a regulatory framework
Some lower-income for the LPG sector and LPG subsidy
household may not afford
LPG cylinder refills.
7. Safety concerns 1.Continuous education campaigns
Fear of LPG explosions due on proper use of LPG could
to LPG leakages or lack of reduce the fears of the public.
knowledge on the safe use of 2.Continuous cooking
LPG by the households. demonstrations at the
community level could reduce
fears associated with LPG use.
3.Additional research into safety of
LPG usage to provide data to help
reduce public concerns
8. Location of the refilling 1. Encourage LPG distributors to
station/Availability of LPG set up refilling stations which
Transportation cost to refill have convenient access to, and
LPG cylinders by the consistent availability of refilled
households cylinders located within a
reasonable distance to
households.
2. Encourage LPG distributors to
consider innovative delivery
mechanisms
3. Development of an LPG
distribution model and public
awareness plan
9. Strong competition of 1.LPG subsidy or capped or fixed
cheaper alternative energy through government regulation to

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 sources below poverty line households.
2.Increasing awareness of the
potential benefits of LPG use over
other fuels for cooking (e.g. time,
health, etc.).
10. Negative perception on Increasing awareness around the
LPG use benefits of LPG and the
Cultural factors such as misconceptions relating to
traditional its use.
values and perceptions (e.g.,
preferring the taste of food
cooked over wood or
charcoal) especially in the
rural households.
11. Project sustainability 1. Develop Monitoring and
Evaluation Framework/systems
2. LPG subsidy or capped or fixed
through government regulation
to below poverty line
households.
3. Continuous sensitization on the
benefits of LPG use over other
sources of energy.

Page 46 of 66
9.0 PROJECT IMPLEMENTATION PLAN
The project will be implemented as per the plan set out in Table below.

PROJECT IMPLEMENTATION PLAN

PROJECT TITLE
MWANANCHI LIQUEFIED PETROLEUM GAS (LPG)
PROJECT (MWANANCHI GAS PROJECT)
PROJECT CONCEPTION AND RESPONSIBLE TIME
INITIATION PERSON FRAME (DAYS)
Prepare Draft Concept Paper SDP 30
Undertake Benchmarking SDP 7
Finalize Concept Paper SDP 7
Prepare Project Budget SDP 7
Request for budgetary allocation SDP, National 1
Treasury,
Parliament
Conduct stakeholder SDP 120
sensitization on the benefits of
using Mwananchi Liquified
Petroleum Gas across the 47
counties.
Identify household beneficiary SDP, MoE 10
for the Mwananchi Liquified
Petroleum Gas Program
PROJECT DEFINITION AND PLANNING
Compile baseline information on Distributors 30
beneficiary households to inform
on infrastructure requirements,
cooking gas demand among
others.
Develop Tender Terms of SDP 10
Reference (ToR) and
Specifications for the
procurement, installation, and
testing of Mwananchi Liquified
Petroleum Gas infrastructure
Advertise, open, evaluate tender Technical 45
and award contract. Committee
Monitor/supervise contract SDP 30
implementation, installation
PROJECT LAUNCH & EXECUTION
Conduct inspection and testing Technical 5
Committee
Conduct Safety Training Contractors 10

Page 47 of 66
 Commission Mwananchi Steering 1
Liquified Petroleum Gas Committee
installations
Handover the Project to learning Steering 1
institutions Committee
Evaluate the impacts of the Technical 90
project Committee

PROJECT PERFORMANCE / MONITORING

Project Objectives Technical 30
Committee
Quality Deliverables Technical 10
Committee
Effort & Cost Tracking Technical 5
Committee
Project Performance Technical 10
Committee

10.0 MONITORING AND EVALUATION PLAN

Monitoring shall entail the systematic process of tracking project activities to
assess their progress, performance, and compliance with the predefined
objectives and requirements. It is an essential project management practice
that helps ensure that the project stays on track and delivers its intended

Page 48 of 66
outcomes effectively. It will involve the continuous collection, analysis, and
reporting of project-related data and information to allow project managers and
stakeholders to make informed decisions, take corrective actions when
necessary as well as identify lessons learnt for upscaling in future projects.
Performance evaluation will assess the project's success in achieving its
objectives. The project will be monitored closely by the project steering and
technical committees through weekly and monthly progress reports, quarterly
implementation reviews, regular technical supervision and reports as required
to enhance success of the project.
10.2 M&E of Project Impact
Evaluation of the project's success in achieving its objectives will be monitored
continuously throughout the project.
10.3 Logical Framework
Table 4: M&E Plan

PROJECT INDICATORS MEANS OF RISKS/

SUMMARY VERIFICATI ASSUMPTIO
ON NS
Goal
Outcom Increased · Reduced Data/ Successful
es usage of LPG usage of statistics on implementati
among low- biomass LPG on of the
income and consumed vs LPG for
households kerosene firewood households'
· Enhance savings. project
d forest
cover
Outputs Construction of Access to Constructed Availability of
bulk storage, affordable LPG LPG budget
bottling and owing to the infrastructur
truck loading economies of e
infrastructure scale
both at the
coast and
inland.

Activitie i. Prepare Approved Budgetary

s Project Project Budget Allocation
budget

ii. Request for Budgetary Approved

budgetary Allocation Budget /

Page 49 of 66
 allocation Supplementa
ry Estimates

iii. Conduct Sensitized Sensitization

stakeholder Stakeholders, Workshops
sensitizatio Stakeholder
n on the acceptance of
benefits of Mwananchi gas
using LPG project
among low-
income
households.

iv. Identify List of areas to List of areas

priority roll be rolled out
out within
the counties
v. Appoint and List of trained Distributors
train distributors and retailers
distributors and retailers training
and workshops
retailers
vi. Commission Commissioning Reports
Model 1 and report
2 LPG roll
out and
distribution
to identified
beneficiarie
s

vii. Monitor/ Status reports Reports

supervise
the
distribution
and refilling
by the
distributors
and
retailers.

viii. Evaluate Monitoring and Report

the impacts Evaluation
of the Report
project

Page 50 of 66
11.0 RISK MANAGEMENT
11.1 Risk Analysis
Like any other project, the Mwananchi Gas project will have risks that will
impact the rollout and implementation of the project. Risk analysis will include
identification of the risks, description and coming up with mitigation measures.
The project will be affected by the following types of risks:

1. Technical and operational risks

2. Financial risks
3. Political risks
11.2 Risk Matrix
The technical committee will monitor potential risks to the project and consider
the need for updating the risk matrix shown in Annex 3.

Page 51 of 66
12.0 PROJECT BUDGET
Activity Amount
Implementation Plan 2,000,000
Sensitization/publicity plan 10,000,000
execution
Stakeholder engagement 15,0000,000
Procurement of specialized 1,155,000,000
equipment (6kg cylinders,
grills, burners, cookstoves,
hosepipes) & standards
Distribution 6,000,000
Logistics 2,000,000
Training of distributors & 3,500,000
NGAO
Miscellaneous 20,000,000

Page 52 of 66
13.0 PROJECT SUSTAINABILITY
Project sustainability
Kenya's government puts the country's LPG adoption initiative in order to meet the
country's clean cooking objective by 2030. The following guidelines need to be put in
place, which includes: -
1. Strong regulatory measures to reduce retail prices and reduce
unauthorized LPG sales.
An audit is required to determine the cost components behind the retail price of LPG
and to assist the implementation of a regulatory pricing model. After that, the posting
of indicative LPG prices (with fair margins) will foster price competition among
brands and increase consumer awareness.
To eliminate refilling irregularities, revisions to the Exchange Pool Regulation should
include a cylinder tracking system and raising the bar for membership in the exchange
pool.
2. Promote demand for LPG among upper- and middle-income consumers.
Until the retail price of LPG has been brought down substantially, it is unlikely that
lower-income Kenyans will sustainably switch to LPG even after receiving a
subsidized cylinder.
In the meantime, the 2015–16 National Household Budget Survey (released in March
2018) and an energy cost efficiency analysis of all cooking fuels should drive the
methodology to make LPG attractive to as many consumers as possible.

3. Develop annual targets and a clear metric to track progress in LPG uptake
and to make possible timely changes to the implementation program.
LPG penetration should be measured in terms of usage per capita. The 2019 census
will confirm actual population growth over the 2013 level. On that premise, a target
for annual total demand through 2030 should be developed. Integrating the per capita
rates so established with the country's national plans, starting with the Third Medium-
Term Plan (2018-22), would facilitate performance tracking and prompt adaptation of
execution plans.

Page 53 of 66
Page 54 of 66
14.0 ROADMAP
The Mwananchi Gas Project Roadmap was developed and is attached herein as Annex 4.

2023 2024

Au
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul g

06-May

13-May

20-May

27-May
07-Aug

14-Aug

21-Aug

28-Aug

06-Nov

13-Nov

20-Nov

27-Nov

05-Aug
04-Mar

11-Mar

18-Mar

25-Mar
04-Dec

11-Dec

18-Dec

25-Dec

01-Apr

08-Apr

15-Apr

22-Apr

29-Apr
04-Sep

11-Sep

18-Sep

25-Sep

05-Feb

12-Feb

19-Feb

26-Feb
02-Oct

09-Oct

16-Oct

23-Oct

30-Oct

03-Jun

10-Jun

17-Jun

24-Jun
01-Jan

08-Jan

15-Jan

22-Jan

29-Jan

01-Jul

08-Jul

15-Jul

22-Jul

29-Jul
%Do
Tasks Start End Duratio Status
ne
n
(Days)
PROJECT
CONCEPTIO 07- 13- In
1
N AND Aug- Oct progres
INITIATION 23 -23 50 s 50% u
07- 12- In
1. Prepare Draft
Aug- Aug progres
1 Concept Paper
23 -23 5 s 100% u
13- 12- In
1. Undertake
Aug- Sep- progres
2 Benchmarking
23 23 22 s 0% u
20- In
1. Finalize
13- Sep- progres
3 Concept Paper
Sep-23 23 6 s 50% u
28-
1. Prepare
21- Sep- Not
4 Project Budget
Sep-23 23 6 started 0% u
Request for 13-
1.
budgetary 29- Oct- Not
5
allocation Sep-23 23 11 started 0% u
PROJECT 14- 30-
2 ROLL OUT Oct- Ma Not
BY NOCK 23 r-24 120 started 0% u
Conduct 14-
2.
inspection and 15- Nov Not
1
testing Oct-23 -23 22 started 0% u
Conduct 15- 15-
2.
Safety Nov- Dec Not
2
Training 23 -23 23 started 0% u
Commission
Mwananchi
2.
Liquified 16- 30-
3
Petroleum Gas Dec- Mar Not
installations 23 -24 75 started 0% u
PROJECT
PERFORMA
3 NCE / 18- 18-
MONITORIN Dec- Dec Not
G 23 -23 1 started 0% u
19- 18-
3. Project
Dec- Jan- Not
1 Objectives
23 24 23 started 0% u
18-
3. Quality
19- Feb- Not
2 Deliverables
Jan-24 24 21 started 0% u
29-
3. Effort & Cost
19- Feb- Not
3 Tracking
Feb-24 24 9 started 0% u
01- 31-
3. Project
Mar- Mar Not
4 Performance
24 -24 21 started 0% u
Evaluate the 01- 30-
3.
impacts of the Apr- Jun- Not
5
project 24 24 65 started 0% u

Page 55 of 66
ANNEX 1: PUBLICITY PLAN

S. Task Name Durati Planned Planned Budget

No on in Start Finish Date
days Date
1 Dissemination of Flyers, Booklets and Circulars
1.2 Preparation of flyers,
Booklets and circulars
designs
Print Designed booklets
and circulars designs

1.3 Circulation of flyers, booklets

and circulars to various
counties
2 Advertising in Billboards and LCD screens
2.1 Design of billboard and LCD
ADS

2.2 Identification of strategic

Billboards and LCD screens
on different towns in Kenya.
2.3 Posting up the ADs on the
billboards and LCD
3 Playing Video clips on investors forums, National televisions Ads and audio
clips on National radio stations.
3.1 Prepare video clips and
audio clips
3.2 Map out TV and Radio
Stations to play the videos
clips on.
3.3 Forward the video clips
prepared to Identified TV
stations and radio stations.
4 Scheduling Interviews and
Talk shows

5 Adverts in local and international digital and print media

5.1 prepare briefs on CCG project

5.2 Identify international and

digital media to forward
the briefs to
5.3 Forward briefs for printing

6 Having Ads on Social media channels

6.1 Prepare ADS to be put up on
social media.

Page 56 of 66
S. Task Name Durati Planned Planned Budget
No on in Start Finish Date
days Date
6.2 Post the ADS on the platforms.

TOTAL

Page 57 of 66
ANNEX 2: STAKEHOLDER SENSITIZATION/AWARENESS WORKPLAN

S. No Task Name Duration in Planned Planned Budget (Ksh.)

days Start Date Finish Date

1 Developing Sensitization Materials

1.1 Design LPG Campaign

sensitization documents

1.2 Print requisite

documents such as; The
Petroleum
(Liquefied Petroleum Gas)
Regulations, 2019; Legal
Notice No 100 and other
LPG campaign documents
designed.
2 Conducting sensitization meeting

2.1 Send meeting

invitations for
sensitization meetings
to all stakeholders
2.2 Conduct meeting with
Ministries, Departments
and Agencies (MDA's)

2.3 Oil Marketing Companies

(OMC's) and private
investors

2.4 Conduct meeting

with County
Government
Education officials
2.5 Conduct meeting with
Selected stakeholders

3 Managing Expectations

Page 58 of 66
S. No Task Name Duration in Planned Planned Budget (Ksh.)
days Start Date Finish Date

3.1 Develop and

standardize
information to be
shared
and disseminated
through sensitization
meetings arranged and
selected
media.
3.2 Develop a monitoring and
feedback mechanism for
continuous project
improvement.

4.1 Collate the issues

that have been
identified as
challenges in the
past, understand why
they happened, and
develop possible
mitigation
measures to address
them.
4.2 Device
information
sharing
techniques
amongst relevant
stakeholders.
4.3 Develop collaborative
projects efforts with
all stakeholders
geared
towards their involvement
and ownership.

4.4 Developing a dispute

resolution
Mechanism.
TOTAL

Page 59 of 66
 ANNEX 3: RISK MATRIX
RISK IMPACT MITIGATION RESPONSI

PROBABILITY

Impact, I (1-
EVENT AND OF THE MEASURES BLE

Risk Rating
DESCRIPTI RISK TO PERSON
ON THE

Coding
Colour
P (1-5)
PROJECT

(P*I)
5)
Illegal Loss of 5 5 25  Strong State
refilling of revenue by enforcement Departmen
LPG the against illegal t for
cylinders governmen refilling Petroleum,
for t  Strengthen National
households distribution Oil
network to Corporatio
support n of Kenya
subsequent (NOCK)
refills and
availability. This
will entail the
construction of
LPG mini-filling
plants,
distribution,
and collection
points.
 Provide unique
branding for the
cylinders.

Ensuring Disruption 4 5 20  Have State

the in supply distribution Departmen
Security of and access centres in all t for
Supply of to LPG for major towns in Petroleum,
LPG for household Kenya National
households s  Have stockists Oil
or appointed Corporatio
retailers in all n of Kenya
small centres (NOCK)

Page 60 of 66
 around the
country
 Install cylinder
tracking system:
-to obtain near
real time
information on
inventory levels,
-to replenish
stocks and avoid
over stocking,
-to identify
points of
diversion of
stock
Political Politicians 4 5 20  Have State
influence or Local continuous Departmen
leaders can engagements t for
talk their with the local Petroleum
constituent political leaders
s out from  Have correct
embracing and timely
the use of dissemination of
LPG for information to
household leaders to avoid
s incitement and
propaganda
Delays in Delays 5 5 25  Fast track the State
the encountere procurement Departmen
procureme d in process t for
nt process purchasing  Have clear Petroleum,
--Services of timelines for National
rendered by cylinders each activity Oil
different and Corporatio
agencies, services n of Kenya
departments offered will (NOCK),
or affect the Kenya
ministries project Institute
involved impementa for Public

Page 61 of 66
 tion Policy
Research
and
Analysis
(KIPPRA)
Safety and The LPG 2 5 10  Enforcement of State
Regulatory cylinders Safety protocols Departmen
compliance are filled  Schedule t for
with a frequent checks Petroleum
highly of the cylinders
flammable and safety
and valves
pressurise  Offer firefighting
d gas. Any training to those
leaks of involved in the
the gas transportation
could and refilling of
cause a the LPG
serious cylinders
explosion  Install the
accident required
which firefighting
could be equipment
fatal where necessary
 Carry out safety
awareness
campaigns
 Provide
designated
emergency
response teams

High Cost The high 3 4 12  The government State

of LPG: cost will should consider Departmen
 Due to discourage subsiding the t for
governm uptake cost of LPG. Petroleum,
ent taxes since many  The government National
on LPG household to take on the Treasury
products s will not initial costs of

Page 62 of 66
 meet the purchasing
cost cylinders and
stoves
Lack of If the 2 4 8  Identify the State
goodwill project relevant Departmen
from the does not stakeholders/ t for
stakeholder gunner end users and Petroleum
s and the support have them
target from the involved from
market end users, the inception of
it will be the project to its
difficult to implementation
implement
Interferenc Will affect 2 4 8  Need for close State
e from penetratio monitoring of Departmen
competitor n of LPG to the market t for
s the target trends to gain a Petroleum
market competitive edge
 Establish and
maintain a
strong
distribution
network
 Build better
customer
relations and
focus

Page 63 of 66
LIST OF REFERENCES

1. ATLANTIC CONSULTING. (2018). SUBSTITUTING LPG FOR WOOD:

CARBON AND DEFORESTATION IMPACTS. France: World LPG
Association. Retrieved from WWW.WLPGA.ORG

2. Energy & Petroleum Regulatory Authority. (2022). ENERGY &

PETROLEUM STATISTICS REPORT - Financial Year ended 30th June
2022. Nairobi: Energy & Petroleum Regulatory Authority.

3. Government of Kenya. (2019, March 14). The Petroleum Act 2019. Kenya
Gazette Supplement No. 30 (Acts No. 2), 167 - 368.

4. ICF Consultants. (2021). Consultancy Services to Develop the Kenya

National Petroleum Master Plan. Fairfax: ICF Consultants.

5. Kenya National Bureau of Statistics. (2022). Economic Survey 2022.

Nairobi: Kenya National Bureau of Statistics.

6. Petroleum Development Consultants Ltd. (2013). Feasibility Study for

Inland Bulk Liquefied Petroleum Gas Storage and Bottling Facilities.
Nairobi: Kenya Pipeline Company Limited.

7. WLPGA. (2023, January 7). World LPG Association. Retrieved from

https://www.wlpga.org: https://www.wlpga.org/about-lpg/what-is-lpg/

8. WHO (2018) – Fact Sheet – Household air pollution and health

9. National Population Census (2019). Retrived from
https://www.knbs.or.ke/download/2019-kenya-population-and-housing-
census-volume-iv-distribution-of-population-by-socio-economic-
characteristics/
10. GLPGP (2019). National Feasibility Assessment: LPG for Clean
Cooking in Kenya. New York: The Global LPG Partnership.

Page 64 of 66