Politics and policy
Bank approves Kenya-Ethiopia electricity line
Posted Sunday, July 15 2012 at 18:26
The World Bank on Friday approved a new transmission line between Ethiopia and Kenya, allowing the northern neighbour to sell its surplus electricity.
The approximately 1,000-kilometre cross-border power line is part of a nearly $1.3 billion project to link the country with energy-producing Ethiopia and a broader bid to connect the electricity grids of Ethiopia, Kenya, Rwanda, Tanzania and Uganda through the Eastern Africa power pool.
“The exported electricity will originate from the large number of existing and future power plants in Ethiopia. When required, the flow of electricity can be reversed and Kenya would thus use the same interconnection facilities to sell electricity to Ethiopia,” said Makhtar Diop, World Bank Vice-President for the Africa Region.
Kenya will receive $441 million( Sh37 billion) and Ethiopia ($243 million or Sh20.66 billion ) in funding to both governments disbursed through the International Development Association—the bank’s fund for the world’s poorest countries.
“This landmark transformational project will change the fundamentals of the power sector in East Africa. It will expand access and lower the cost of electricity supply to homes and businesses across Kenya and help to reduce thermal power emissions, a clear benefit to the region’s environment,” said Mr Diop in a statement.
The regional infrastructure project will lower cost of power supply by giving Kenya access to more efficient power technologies and Ethiopia’s larger scale of production.
Under a power purchase agreement entered in December, Kenya Electricity Transmission Company (Ketraco) would by 2016, inter-connect the national power grid to the Ethiopia Electricity Power Company, enabling Kenya to tap the electricity by 2016. The pact paves the way for Kenya to import 400 megawatts of cheaper hydro power.
Transmission costs between Moyale and in Nairobi will provide an additional Sh2 a kilowatt hour. At a maximum of Sh9 a kilowatt hour, the cost of hydro-electricity will still be lower than the current rate.
The African Development Bank (AfDB), the WB, and the French Agence Française de Development (AFD) are jointly funding the project.