World Bank lends Kenya Sh26bn for power projects

Kenya has received a Sh26 billion ($330 million) loan from the World Bank to expand electricity access and deepen investment in green energy.

The Kenya Electricity Expansion Project aims to increase access to power in urban and rural areas and also enable the country to expand geothermal energy generation.

“Kenya has demonstrated a strong commitment to clean and green energy by exploiting its geothermal potential,” said Mr Johannes Zutt, the World Bank country director for Kenya.

“The bank is supporting these efforts to promote equitable access by Kenyans to modern energy while protecting the environment,” he said.

The project is part of over $1.4 billion (Sh110 billion) being invested in the electricity sector by the government, the bank and other development partners.

The aim is to support Kenya’s strategy to accelerate infrastructure development as a means of strengthening foundations for growth and competitiveness.

Extra power

The need for extra power is necessitated by a fast-growing economy and population as well as rising demand not at 8 per cent each year.

Matters are only made worse by Kenya’s hydro generation capacity being strained by chronic droughts and the impact of deforestation.

Kenya has relied on hydro energy to provide up to 90 per cent of its electricity requirements.

The country produces about 1,080 MW of power and at peak hour, demand almost reaches 1,000 megawatts.

The country, needs to add another 1,800 megawatts in new power generation to its grid to meet growing demand.

About 200 MW comes from geothermal sources now, although the government estimates it has the potential to produce 7,000 MW.

The aim is to raise production by 2,000 MW by 2014.

Energy minister Kiraitu Murungi recently said that Kenya needed $1.02 billion in the next three years to tap its geothermal power potential seen as an answer to weaning the country from water sources.

The World Bank loan will build on the energy sector recovery project, which the bank has supported since 2004 with an investment of $160 million to increase geothermal generation, improve distribution and implement electrification programmes to try and cut down on regional disparities.

“The project supports the climate change and infrastructure development pillars of the government’s Vision 2030 long term development strategy,” says Mr Patrick Nyoike, Energy permanent secretary.

“It will strengthen the energy investment programmes which have been enabled by the comprehensive policy and regulatory reforms that Kenya has implemented with the bank’s support since 1981.”