Kenya Power employees carry out routine maintenance along Temple Road in
Nyeri town on March 13, 2014. Kenya Power boss Ben Chumo said dedicated
lines will be set up to serve the class of customers in order to
cushion them in the event of blackouts. Kenya Power will appoint
managers to run its business in the counties by September, if a
restructuring proposal is approved by the company’s board. PHOTO/FILE
NATION MEDIA GROUP
Kenya will receive Sh10 billion from the
African Development Bank to finance construction of electricity
transmission infrastructure that will aid the importation of power from
Ethiopia.
On Wednesday, the bank’s management
recommended Kenya’s funding to the board of directors after a
feasibility study on the project gave it a clean bill of health.
“The
project is technically, economically and financially sustainable.
Technical sustainability is ensured by use of standard, state-of-the-art
technology.
“Economic and financial sustainability
will be ensured by application of tariffs that fall within a range that
keeps KPLC interested in buying power as an alternative to more costly,
domestic fossil-fueled thermal generation,” reads a report on the
project.
INTECONNECTOR
A
deal reached with Ethiopia in 2011 allows Kenya to import 400 megawatts
of electricity to boost local production capacity, which is below
demand at just 1,700 megawatts have been built since Independence.
It
is hoped that construction of an interconnector between Kenya and
Ethiopia will allow the country to tap into the Eastern Africa Power
Pool from where it can draw electricity from countries with surplus
production and also sell in case local production exceeds demand.
According
to the feasibility study, the total cost of the project is estimated at
$1.26 billion, out of which $760 million relates to construction of the
portion that belongs to Kenya.
AfBD’s resources will
account for 27 per cent of the entire cost. Other financiers include the
World Bank (54 per cent), the French Development Agency (9 per cent)
and the governments of Kenya and Ethiopia. These will contribute 7 and 3
per cent, respectively.
ERRATIC SUPPLY
In
May 2012, Kenya signed a $441 million loan deal with the World Bank in
respect to the project, whose completion date has been set for 2016.
This
paved the way for the Kenya Electricity Transmission Company (Ketraco)
to enlist contractors to build substations at Suswa in Kenya and
Wolayita Sodo in Ethiopia from where power will be connected to the
national grids of both countries.
Under the AfBD’s
Country Strategy Paper for Kenya (2008-2013), the bank has committed to
support the country’s infrastructure development to, among others,
address problems related to its erratic supply of electricity.
“The
CSP is in line with the country’s long term development strategy,
Vision 2030 and its medium term plan in which expansion of electricity
infrastructure is a top priority,” said AfDB.
REDUCING RELIANCE ON HYDRO
The government has set a target to increase the total installed generation capacity by 5,000 megawatts in 40 months to 2016.
According
to the ministry of Energy and Petroleum, this will include a generation
mix from renewable sources, such as geothermal, wind and solar, and
“cheap” sources of power like coal and natural gas to reduce the
country’s reliance on hydro resources that currently account for more
than 40 per cent of the total capacity.
Investments in
manufacturing have been low, according to data from the Kenya National
Bureau of Statistics, due to high energy costs resulting from the
inability of the current supply to meet demand.
With
the additional capacity, the ministry of Energy and Petroleum is hopeful
that the average cost of a unit of power will decline by half from the
current 18 US cents, and increase access to power to 70 per cent of the
population.
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