Kenya, Skypower in Sh220bn power deal

Saturday July 25 2015

Director Trade Assist International Fidelis

Director Trade Assist International Fidelis Wanjiku and Dr Harold Smith of OyaGen USA during the two day USA- Kenya Trade Direct Business Forum that kicked off Tuesday at The Royal Orchid Hotel, Nairobi. The two are part of a team organising partnerships with local SMEs at the Global Entrepreneurship Summit. PHOTO | LILIAN OCHIENG | 

By JOSHUA MASINDE
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Kenya will on Sunday sign a Sh220 billion deal to develop a 1,000 megawatt solar power project over the next five years with the support of Canadian energy firm, SkyPower.

The move is in a bid to increase the share of renewable energy onto the national grid. The landmark deal will be signed between SkyPower and Kenya’s Energy ministry. The announcement, made during the Global Entrepreneurship Summit (GES), underlines a raft of investment deals signed between global companies, financiers, entrepreneurs and governments.

SkyPower has developed over 25,000 MW of solar power projects worldwide, with 6,000 MW having been recently announced in bilateral agreements for development in Egypt and Nigeria over the next five years. 

In March this year, SkyPower and International Gulf Development (IGD) signed an agreement with the government of Egypt to develop 3,000MW of solar power, a project that would be implemented over four years at a cost of $5 billion.

 “SkyPower develops, finances, owns and operates solar energy projects from the initial stages through commercial operation in more than 60 countries around the world,” the company says on its website.  

Kenya is keen to ramp up its power capacity to 5,000 MW by 2018. Currently, the country has an installed power capacity of about 2,000 MW.

The country is moving to tap into renewable power production sources such as geothermal, wind and solar. Kenya is also targeting to explore a coal project in Kitui to boost power capacity, a development set to bring down the cost of power and of doing business in the country. 

A number of deals seeking to increase power production in the country were also signed at the GES meeting in Nairobi.

US multinational, General Electric (GE), signed a Sh15 billion deal with Kenya’s Kipeto Energy to build a 100 MW wind power station in Kajiado County. The Sh15.5 billion ($155 million) deal also includes a 15-year service agreement, with GE being the sole supplier of wind turbines and other equipment for the project. 

Earlier this month, power producer KenGen said it would build a 400 MW wind power plant in Meru beginning next year.

The first phase of the project, which will generate 100 MW, will cost Sh27 billion and is set for completion in 2017. Kenya, in collaboration with private investors and development finance institutions is also developing a 300 MW Lake Turkana Wind Power Project in the north-east part of the country.  

The renewable energy plans are in line with President Obama’s Power Africa initiative, which seeks to add more than 30,000 MW of “cleaner, more efficient electricity generation capacity as well as increased power access with 60 million new connections throughout Sub-Saharan Africa”.  

“Our Power Africa initiative has been leveraging private capital to invest in electrification all across the continent. Our preliminary goal was 10,000 MW; now we’re looking at 30,000 MW and we’re well on our way,” he said.