Kenya: Private Investors to Add 80 Megawatts To National Grid

Transformer serving this blogger in Migori County, Kenya

The World Bank and private investors are set to add 80 megawatts to the national grid in 12 months through Gulf Power Ltd’s thermal plant in Mombasa Road, near Athi River.

Gulf Power has brought local investors from Gulf Energy Ltd and Noora Power Ltd in the Sh9.12b project which includes Sh2.7b in equity investments and Sh6.4b long-term debt financing.

WB gave the project a major boost through Sh4b loan which will be repaid for more than 15 years.

Already Gulf has signed a power purchase agreement with Kenya Power and Lighting Company (KPLC) for electricity it will generate. The agreement was also signed by the government, WB and JP Morgan Chase Bank N.A. of London.

“The WB has now signed partial risk guarantees for a third private power producer to increase the availability of electricity and diversify country’s power,” Johannes Zutt, World Bank Country Director for Kenya said.

The move will increase stability of supply of electricity to help businesses grow and create jobs for citizens.

The Gulf Power loan approved in February last year is among WB’s loan with other projects benefiting being Thika Power and Triumph Power Generation which were finished on August and December 2012 respectively.

“The loan supports innovative public-private partnership program that helps African countries to unlock their energy potential and improve competitiveness,” Lucio Monari, World Bank Sector Manager for Energy in the Africa Region explained.

The government plans to increase private sector participation and utilize low carbon resources such as wind and geothermal to increase electricity generation capacity by an additional 2,000Mw.

Manuel Odeny © 2013

AfDB Regional Director Visits Menengai Geothermal Project

A geothermal well at the Menengai Crater

Mr. Gabriel Negatu, AfDB’s Regional Director in charge of the East African Regional Centre (EARC), paid an official visit to the Bank-funded Menengai geothermal site in Kenya’s Rift Valley last Friday. The 400 MW project will cost approximately US $488 million, with the AfDB providing US $120 million, and is expected to increase the country’s installed capacity by almost 30 per cent.

The geothermal project is an integral part of Kenya’s Vision 2030, under which the government has set for itself the goal of becoming energy self-sufficient to drive the increasing needs of the fast-growing economy. Kenya’s Rift Valley region is especially rich in geothermal resources and the government has placed special emphasis on tapping this natural and environmentally friendly resource through the establishment of the Geothermal Development Company (GDC).

Mr. Negatu was guided through the Menengai project by GDC Managing Director and Chief Executive Officer Dr. Silas Simiyu, alongside representatives from both institutions.

During the tour, Mr. Negatu expressed his satisfaction with the pace of implementation of the first phase of the project, which was officially launched by Kenyan President Mwai Kibaki earlier this year.

The Menengai Geothermal Development Project is situated within the eastern sector of the African Rift system, about 180 km northwest of Nairobi. The project aims to develop the Menengai geothermal steam field to produce enough steam for a 400 MW power plant that will be operated by the private sector as an Independent Power Producer (IPP) or through a Public Private Partnership (PPP).

The project will enable a substantial increase in the provision of additional reliable, clean and affordable power generation capacity to Kenyan households, businesses and industries, with an increase equivalent to 26 per cent of the current total installed generation capacity in the country. The steam field development will produce electricity generation equivalent to the consumption needs of up nearly 500,000 households, of which 70,000 are in rural areas, and 300,000 small businesses, as well as providing 1,000 GWh of energy to businesses and industries. The project will also reduce CO2 emissions by close to 2 million tons per annum.

Access to clean energy is expected to significantly improve health and education opportunities, particularly for women and girls in the area. The project will also ensure an employment ratio of 30 per cent women, which is considerably higher than the standards of small towns in the region. The transfer of the potable water facility to the community/municipality will positively impact and empower women who normally collect water for domestic purposes