Why Kenyan government suspended Tanzanian billionaire Rostam Aziz’s plans to build cooking gas plant

The Kenyan government has halted Tanzanian billionaire Rostam Aziz’s plans to build an LPG plant and storage facilities in Kenya’s Export Processing Zone through his liquefied petroleum gas (LPG) supply company Taifa Gas.

The freezing of his statutory licenses, which comes after the annual trade between Kenya and Tanzania surpassed Ksh100 billion ($5.28 billion), could lead to a trade spat between the two East African countries.

According to Business Daily, EPRA, Kenya’s energy and petroleum regulator, cited environmental risks posed by the 30,000-ton gas-handling facility as one of the primary reasons for declining to approve the application from Taifa Gas, Tanzania’s largest LPG supply company.

“We did not clear their Environmental and Social Impact Assessment (ESIA) because of certain technical deficiencies,” EPRA said. “The ESIA had some technical deficiencies which we want them to address before we consider their application further.”

Taifa Gas’s entry into Kenya’s LPG gas market was included in a trade agreement signed by Kenyan President Uhuru Kenyatta and Tanzanian President Samia Suluhu as part of an effort to reduce the cost of handling and evacuating cooking gas from ships to the mainland and, therefore, cooking gas prices in Kenya.

The regulatory stumbling block imposed by EPRA could spark another battle for control of the Kenyan cooking gas market between Mombasa-based tycoon Mohamed Jaffer and Aziz.

Formerly Mihan Gas, Taifa Gas is Tanzania’s largest LPG supplier. The LPG supply company has built more than 30 plants and storage facilities in the country under his leadership.

Aside from his stake in Taifa Gas, Aziz owns Caspian Mining, a contract mining company in Tanzania, as well as real estate in Dubai and Oman.

According to Forbes in 2013, he was the first Tanzanian to have a net worth of more than $1 billion.

Aziz’s fortune is chiefly derived from his ownership of Vodacom Tanzania, the country’s largest telecom service provider. In 2014, he sold his Vodacom Tanzania stake to Vodacom Group South Africa for an estimated $400 million.

Recently, the Tanzanian billionaire and AXIAN Group, a Malagasy-based pan-African conglomerate led by multimillionaire businessman Hassanein Hiridjee, announced plans to invest Tsh1 trillion ($430.2 million) in MIC Tanzania, the parent company of Tigo Tanzania Plc and Zanzibar Telecom (Zantel).