Energy ministry launches Sh152bn expansion project
Energy minister Kiraitu Murungi (right) and World Bank country director Johannes Zutt launch the electricity expansion project. Photo/FREDRICK ONYANGO
Kenya is making quick progress towards shift to more reliable geothermal power following the launch of a Sh152 billion ($1.9 billion) energy expansion project set to connect millions of consumers to the national grid.
The project funded by World Bank and other development agencies will see Kenya Electricity Generating Company (KenGen) boost its geothermal production capacity from 105 megawatts to 385 megawatts by 2013.
It will also provide 1.5 million more Kenyans with electricity in the next six years in urban, peri-urban and rural areas.
“This is part of the drive to shift the power base from the weather-dependent hydro and expensive thermal sources to geothermal that is not affected by weather conditions,” said Energy Minister Kiraitu Murungi.
Drilling of the geothermal wells will be financed by Exim Bank of China to a tune of Sh7.6 billion ($ 95 million), KfW of Germany Sh1.2 billion ($15 million) and the Government of Kenya will provide Sh17.4 billion ( $217 million).
About Sh82 billion ($1.03 billion) has been set aside for power generation.
The project is also set to improve supply lines and reduce outages during transmission.
About Sh19.7 billion ($247 million) has been earmarked for construction of five new transmission lines between Eldoret and Kitale, Kisii and Awendo, Kindaruma to Garissa via Mwingi, Olkaria and Lessos and between Suswa and Isinya.
The project is expected to enhance Kenya Power and Lightning Company’s (KPLC) connection rate, enabling it to meet its annual target of 200,000 new connections.
“We will connect at least one million new consumers by 2012 and we expect to have raised our electricity access from the current 23 per cent to 50 per cent after the project is completed in 2016,” said Mr Murungi.
Mr Murungi said that the priority areas for electricity expansion will be the agricultural economic zones in a bid to mitigate losses incurred by farmers due to unavailability of power.
“We have identified the fishing industry, dairy, coffee and tea growing areas as the priority areas to allow for the establishment of cooling plants. This will enable farmers and fishermen time to bargain for better prices since they wont be forced to sell their products at low prices for fear that they will get spoilt,” said Mr Murungi.
World Bank country director, Mr Johannes Zutt said the bank has injected Sh26.4 billion ($330 million) as part the energy sector investment to increase geothermal power generation, enhance connectivity, and refurbish power plants to enhance efficiency.
“No country has ever achieved eight to 10 per cent growth annually needed normally to reduce poverty without modern energy,” said Mr Zutt.
Energy permanent secretary Patrick Nyoike said that the government has also asked the World Bank to provide partial risk guarantees for the five Independent Power Producers (IPP) projects with a combined generation capacity of 600MW, demanding for payment securities.
“The IPPs developers have been awaiting payment securities to roll out their projects but KPLC’s balance sheet cannot support the required irrevocable standby letters of credit to cover debt services,” said Mr Nyoike.
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