James Anyanzwa
20 February 2004
Nairobi — The Sondu Miriu hydro-electric power station gets a major push towards completion today with the signing of an agreement for the release of Sh8.5 billion for work on Phase Two of the project.
The signing of a financial agreement between Kenya and Japanese governments comes more than two years after work stopped amid frosty relations between the former Kanu government and international donors.
Then, the concern was that the Kenya government locked the capacity to service the loan given the poor shape of its finances that had forced out multi-lateral lenders such as the International Monetary Fund and the World Bank.
Local community groups had also raised concern about the environmental impact of the project with some groups writing protest letters to Japanese government.
The decision of the Japanese government to withhold the Phase Two funds aroused concern that the project would become another of the many white elephants that dot Kenya's countryside.
Some Sh12 billion is required to complete the power project, which Kenya is expected to repay within a period of 20 years.
It had been argued that Kenya's foreign debt and her problems with debt servicing were being enhanced by white elephants such as the molasses plant in Kisumu.
The Sondu Miriu project is expected to inject additional 63 megawatts of electricity into the national grid.
The figure is still below what experts say Kenya needs to meet its energy requirements as it strives to add impetus to the sluggish economy.
It is further expected that the project will play a crucial role in uplifting the standard of living of the surrounding communities through employment creation. Phase Two of the project will provide employment to 2,000.
The government has been losing an estimated Sh140 million per month in form of penalties for idle construction machinery, staff and lost power generation.
Resumption of funding to the project comes four months after the Bretton Woods institutions unanimously agreed to readmit Kenya to their lending programmes citing the country's commitment to the fight against corruption and improved monetary discipline exhibited by the new Narc government. Japan has also indicated that it fully supports Kenya's economic recovery strategy and on-going efforts to restore peace in the region.
Be the first to Write a Comment!
Copyright © 2004 The East African Standard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
