- The government is set to borrow more money to finance the energy infrastructure
- This is an effort to establish the universal electricity access over the next five years
- The project was developed in partnership with World Bank and seeks to produce more than 3,000MV
- The new energy investment strategy is based on the Government’s projection that energy demand will increase over the next five years
Kenyans should brace themselves for more debts as government is looking to spend KSh 1.5 trillion in energy infrastructure in an effort to establish universal electricity access over the next five years.
In a prospectus by the Energy Ministry detailing the new plan, the strategy was developed in partnership with the World Bank and seeks to develop more than 3,000MW.
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In a prospectus by the Energy Ministry detailing the new plan, the strategy was developed in partnership with the World Bank.
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The project will be financed through a combination of financing option including public debt and concessionary loans, the Standard reported on Friday, December 7.
This will include KSh 520 billion targeted for geothermal power development, KSh 290 billion in power generation through other sources.
Another KSh 290 billion will be used to increase power transmission capacity at the state-run Kenya Electricity Transmission Company, (Ketraco).
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The Government is also seeking investments totalling KSh 290 billion to upgrade Kenya Power’s electricity distribution network.
It will also use another KSh 900 million to develop mini-grids and isolated solar plants in marginalised counties.
The new energy investment strategy is based on the Government’s projection that energy demand from domestic, small and large corporate users will increase over the next five years.
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“It is anticipated that accelerated consumption of energy will be realised once some of the Vision 2030 projects begin to be implemented, especially given the focus on manufacturing of the “Big 4” agenda,” says the Energy Ministry in a prospectus detailing the new plan.
According to the ministry more than KSh 700 billion has already been raised in financing for the projects, including KSh 200 billion for geothermal, KSh 100 billion for transmission
It has also raised KSh 150 billion for distribution of the projects.
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Another KSh 200 billion has been raised in developing other sources, excluding geothermal, with Sh 50 billion pledged for building off-grid projects in solar energy.
The new investment strategy is a revision of the government’s ambitious targets of setting up 5,538MW of installed electricity capacity by the end of last year that fell short by more than 57%.
“Over the past 15 years, the average growth rate of peak demand has been around six per cent per annum. Over the past five years, average growth has been higher at 7.4 per cent.” explains the ministry in the prospectus.
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