Lucas Barasa
7 October 2008
Nairobi — Efforts to end the country's energy problems were stepped up on Tuesday following the establishment of two new parastatals in the sector.
President Kibaki said the National Transmission Company and Geothermal Development Company will be funded by the State.
He said Sh750 million had been set aside in this year's budget for the transmission company which will take over some key roles of Kenya Power and Lighting Company.
Currently, KenGen is in-charge of power generation, while KPLC has been supplying and selling the product.
Were reluctant
"There is an urgent need to reduce high system losses and low voltages. Indeed, the current poor quality of power is largely due to lack of critical investments by KPLC over the years," the President said.
Addressing a National Energy Conference in Nairobi, the President said that the Geothermal Development Company will be set up in the next two months.
The company will exploit the country's geothermal potential and promote investment as many private sector players were reluctant to venture into the sector.
Only 130 megawatts of geothermal energy is being exploited although the sector has a potential to produce between 4,000 to 7,000 megawatts. Geothermal energy is cheaper than electricity and costs less than Sh4.20 per kilowatt hour.
Speed up plans
The President said Sh4.5 billion had been allocated for a 140 megawatt geothermal plant in Olkaria. He urged the private sector to invest in a dry cargo handling terminal for coal and other products and a 300 megawatt coal-fired plant in Mombasa.
The President directed Energy minister Kiraitu Murungi and acting Finance minister John Michuki to speed up plans by new shareholders to take over the running of Mombasa's Petroleum Oil Refinery as the shareholders have agreed to divest.
He said a number of foreign investors, including the Libyans that bought the Grand Regency Hotel, were interested.
The President said the refinery was old and unable to compete with cheaper, high quality imported products.
He also said that the upgraded Mombasa-Nairobi oil pipeline will be commissioned in three weeks and reiterated his call to the Finance ministry to review taxes on electricity to ease the burden of high tariffs.
Mr Murungi said the directive will be implemented immediately acting Finance minister Michuki returns from an official visit abroad.
The Energy and Finance ministers were also told to fast-track sourcing of Sh14.8 billion for the building of a parallel oil pipeline from Nairobi to Eldoret to ease supply to western Kenya.
The President said consumers in Kenya and neighbouring countries were paying more for fuel due to expensive mode of transport using road tankers.
The President said the availability of adequate and reliable electricity at affordable tariffs is crucial to economic growth and improvement of lives.
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