Joseph Njoroge, the Energy and Petroleum Principal Secretary. PHOTO/FILE
The Kenya Electricity Transmission Company (Ketraco) is banking on private investors to mobilise $5.9 billion (Sh597 billion) required to build 18,300kms of high voltage power lines by 2030.
The power lines are used to transmit electricity over long distances.
Energy and Petroleum Principal Secretary Joseph Njoroge on Monday said guidelines on Public Private Partnerships (PPPs) would be drafted by the first quarter of next year to accommodate private investors.
Ketraco plans to hire a consultant to assess some of the pilot projects to be given priority under the financing model.
“We have doubled the number of (electricity connections) in the past three years, that means we also need to escalate and fast-track investments in transmission so we can create a vibrant and robust power system,” said Mr Njoroge.
He said Sh300 billion was mobilised from lenders and the Treasury in the last three years to finance ongoing transmission lines projects but added that the Treasury is constrained.
“This means every year we need Sh100 billion in the transmission projects and this will not be possible through exchequer resources so that means we look for other opportunities for mobilising this financing,” he said.
Mr Njoroge was speaking at a Nairobi workshop Monday. The conference brought together global experts to help Kenya assess the best model for implementing PPPs in the electricity transmission sub-sector.
Ketraco managing director Fernandes Barasa told the forum that the firm requires about $6.5 billion (Sh658 billion) to implement the country’s massive electricity transmission plan.
Committed funds amount to about $615 million (Sh62.2 billion).
“A financing gap of $5.9 billion exists, 4,300km of the proposed projects have feasibility studies and the financing requirement is about $2.1 billion (Sh21 billion),” said Mr Barasa in a presentation made on his behalf by John Mativo, Ketraco’s chief manager in charge of planning and development.
Two approaches under the PPP model have been identified. They include the EPC (engineering, procurement and construction) plus financing where contractors bid for projects and identify a financier to meet costs.
The other model is the PPP which would attract private financing. Mr Njoroge said the Government would seek to replicate the success of PPPs witnessed in electricity generation.
Kenya enacted the PPP Act of 2013. According to Mr Mativo, among projects seen as front runners in the consideration for the PPP model include the 400kV double circuit Menengai-Rongai line which will evacuate 400MW from Menengai.
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