Muna Wahome
20 July 2004
Nairobi — A multimillion shilling package for the electricity industry has received key backing with the World Bank board of directors approving the bulk of the funding. The board meeting early last week, reliable energy sector sources told BusinessWeek, stamped the release of the $80 million which will open taps for up to Sh20 billion in funding.
It brought good relief to the sector in the midst of corruption hullabaloo, which according to British high commissioner Edward Clay could negatively impact on development aid.
As a matter of fact, the initial negotiating mission to Washington had been delayed for a week in May, following suspension of Finance Permanent Secretary Joseph Magari who was embroiled in the undying Anglo Leasing & Finance scam as the Treasury accounting officer.
Mr Magari was slated to lead the team which was eventually led by former Energy minister Ochillo Ayacko. A second team was to head for Paris from Washington. Mr Magari has since been sacked (for the second time in the same position) and replaced by Joseph Kinyua, probably smoothing the way for the disbursement.
Another issue which was of concern to the donors according to the aide memoire prepared by top-level World Bank team in April was the Nyanja Report, which indicted former managers at the corporation. However, the matter is still bogged down in the legal process.
The team tabled two sets of documents during the negotiation. They are a draft letter of sector policy and a draft procurement blue-print and project implementation schedule for all implementing agencies.
In the intervening period, Electricity Regulatory Board which is also involved in the programme has released documents governing the industry as agreed. They include Draft Rules and Regulations on licensing and metering and Kenya Electricity Industry Code.
World Bank was not available for comment while the minister was said to be away.
Despite the shenanigans in political circles, there were no major fears in the Government circles that World Bank, traditionally the most reliable partner in the power sector, would withhold funds.
European Union and the French are expected to follow the World Bank example soon. Actual funding, which is critical singularly in shaking up the Kenya Power & Lighting Company, is anticipated to start flowing in September, latest October of this year.
The total amount of funding hoped for ranges from $205 (Sh16 billion) to $265 or Sh21 billion. The bank's soft-term project lender, International Development Association is to provide some $75 million with further possibility of releasing between $5 million to $80 million.
With the World Bank nod, the Agence Francaise Developpement (AFD) or the French Development Bank and the European Investment Bank have indicated willingness counterfund $110 million. The Government of Kenya is supposed to provide another $35 million.
KPLC, Kenya Electricity Generating Company, ERB and the ministry of Energy are set to benefit from the funds. KPLC has of late been experiencing poor power distribution because of the poor network. Surprisingly, a letter from the new minister Simeon Nyachae ordered all parastatals under him to halt recruitment and tendering process awaiting his return from a trip abroad. He was set to return this week.
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