Kenya moves closer to power supply deal with Ethiopia

Kenya and Ethiopia have resolved differences over the electricity import deal that stalled two years ago amid opposition by environmental groups to the construction of a new hydropower dam in the neighbouring state.

The move adds a new impetus to Kenya’s quest to turn to its northern neighbour for additional electricity to fix an energy supply shortage that has deepened in the last three years with rapid economic growth and erratic weather.

Top Ministry of Energy officials are this morning expected to meet their Ethiopian colleagues in Nairobi for talks on a deal that could see Kenya get hooked to Ethiopia’s national power grid.

Energy permanent secretary Patrick Nyoike says the parties have cleared major obstacles to the 400 Kilovolts international power transmission line.

The 1200 kilometer power grid is to be built at a cost of Sh29 billion.

“Environmental issues have been cleared and we are meeting the Ethiopians tomorrow (today) to finalise the details,” said Mr Nyoike on the telephone.

The African Development Bank (ADB), the lead financier of the project, is also set to meet environmental activists later this week.

Ethiopia is the only Eastern African country with a sufficient power supply backed by a reserve margin of more than 30 per cent – double the recommended margin of 15 per cent.

The Horn of Africa country is expected to realize a generation capacity of 2,000 mega watts by the end of this year once the three new hydropower projects it is building are complete and intends to export the surplus to neighbouring states.

Today’s meeting is expected to pave the way for construction to begin mid next year and enable Ethiopia to export electricity to Kenya in 2012.

Energy experts see the project as critical to Kenya’s long term energy security needs with the potential to add more than 500MW to the national grid at a cost of Sh29 billion “within the shortest time possible.”

It takes at least seven years to develop new hydropower sources even with ready financing. Geothermal power, which has proved to be Kenya’s viable alternative energy source, costs more and much longer (at least 10 years to develop).

Heavy reliance on hydropower at a time when weather patterns are becoming unpredictable has only deepened Kenya’s energy crisis that began in earnest two years ago as economic growth rose past six per cent per annum without a corresponding growth of new energy sources.

Kenya was initially set to import power from Ethiopia’s contentious and biggest hydropower project, Gibe III —with a potential power generation capacity of 1800MW, but the plan was put on hold after activists raised concerns over the possible environmental and social impact of the new dam forcing financiers to withhold their support.

Delay of Gibe III saw Kenya and Ethiopia governments open negotiations for a possible electricity supply deal from Ethiopia’s national power grid upon commissioning of the Gibe II hydroelectric dam that is currently undergoing trials.