Kenya to Increase Power Supply as Economy Grows
Date: 19-Aug-05
Country: KENYA
The additional 423 megawatts of capacity is expected to be installed in the period between July 2006 and July 2008.
Kenya, which has an installed generation capacity of 1,032 megawatts, has seen peak demand for electricity increase by 17.2 percent in the last two years.
"The growing power demand is consistent with the economic recovery as evidenced by the 4.3 percent GDP (gross domestic product) growth rate registered in 2004, and which is projected to rise to 5 percent this year," the minister for energy Simeon Nyachae said in a statement.
Analysts say Kenya's economy has shown signs of recovery since President Mwai Kibaki took office in late 2002, partly because businesses accessed cheaper credit after interest rates fell sharply.
Although Kenya's economy is the biggest in eastern Africa, it underperformed badly during the later part of former President Daniel arap Moi's 24-year rule, weighed down by mismanagement and endemic corruption that drove away crucial financial support from donors.
The International Monetary Fund and the World Bank led a resumption of donor lending to Kenya in 2003.
But lately many of the donors have criticised Kibaki's government saying a resurgence in corruption and sluggish reforms have stopped the domestic economy from realising its full potential.
Nyachae said the state-owned Kenya Electricity Generating Company (KenGen) is expected to install new gas turbine, geothermal and hydro capacity to generate 278 megawatts and an extra 30 megawatts of wind power.
Independent power producers will install capacity to produce an additional 115 megawatts, Nyachae said.
The ministry said it had awarded a contract for a company to study the vaibility of drilling coal deposits located in the eastern parts of the country by the end of this year.
More power is also expected to be easily available after Kenya, Uganda and Tanzania connect their power grids.
"Electrical power trade between Kenya and Tanzania is expected by 2009," Nyachae said.
China agreed this month to provide Kenya with 2.6 billion Kenya shilings ($34.32 million) mainly to modernise and boost power distribution at monopoly state-run Kenya Power & Lighting Company (KPLC) (KPLA.NR>, Kenya said on Wednesday.
About 2 billion shillings of that is a concessional loan that would go to reform the power company to end inefficiencies and power distribution losses blamed by domestic industry for costly electricity tariffs.
The balance of 600 million shillings is a grant to be used in yet-to-be decided projects.
