9 July 2012

Kenya's Energy Projects to Cost Sh600 Billion

The country's energy projects in the near term will cost US$7.24billion (Sh608billion), the Energy Regulatory Commission has said. The projects covering generation (Sh302.4bn), transmission (Sh160bn) and distribution (Sh47.5bn) are expected to add 2376 Megawatts from 27 power plants to the country's energy needs. "US$7.247billion is required to implement generation, transmission and distribution projects planned for the medium term," ERC director-general Engineer Kaburu Mwirichia said. "We expect the peak demand will rise from 1286 this year to 1997 in 2016."

The current installed power capacity in the country is 1616MW but planned projects will see the country get 930MW from fossil fuels and 1446MW from renewable energy, Mwirichia said. Among the projects expected to consume a lot of power include the light rail planned for Nairobi, expected to be completed by 2014, the second container terminal at the port of Mombasa and the new Lamu Port. By 2016, four new diesel power plants generating a total of 330MW and one 600MW coal-fired plant will be built.

Another 11 geothermal projects will generate 989MW while six new mini-hydro stations will add 59MW to the national grid. Four wind power projects will inject an additional 380MW with 300MW of that coming from the giant Lake Turkana Wind Power project. A biomass plant will generate a further 18MW. Kengen will produce 46 per cent of this new power while independent power producers will make up the rest.

The bulk of the funding for these projects, Mwirichia said, has been secured. For instance, Kengen has already secured $1.3bn (Sh109.2bn) for its 280MW geothermal project at Ol Karia. The Geothermal Development Company has already received funding for its phase 1 of its Menengai geothermal project, expected to generate 400MW of power from 120 wells at a cost of Sh17billion. Lake Turkana wind project and its associated transmission line are expected to reach financial closure once they receive certain risks' guarantees from the World Bank.

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