NAIROBI, October 21, 2010—Kenya’s government and the World Bank today launched a US$330 million energy project to expand electricity access to Kenyans and deepen investment in green energy.
The Kenya Electricity Expansion Project approved by the World Bank Board of Executive Directors on May 27, 2010, will increase electricity access to Kenyans in urban, peri-urban and rural areas. It will also enable Kenya to expand geothermal power generation as part of its green energy development strategy.
The new project, which was officially launched in Nairobi by Kiraitu Murungi, Kenya’s Minister for Energy, is part of a US$1.4 billion energy sector investment program by the government, the Bank and other development partners.
“The overall objectives of the Electricity Expansion Project are to increase Kenya’s generation capacity, efficiency and quality of electricity supply,” Murungi said.
The project is part of Kenya’s electricity scale-up program and will support the government’s strategy to accelerate infrastructure development to strengthen foundations for growth and competitiveness.
“Kenya has demonstrated a strong commitment to clean and green energy by exploiting its geothermal potential,” said Johannes Zutt, the World Bank Country Director for Kenya. “The Bank is supporting these efforts to promote equitable access by Kenyans to modern energy while protecting the environment.”
The project will build on the Energy Sector Recovery Project, which the Bank has supported since 2004 with an investment of US$160 million to increase geothermal generation, improve electricity distribution and implement electrification programs to support economic growth and reduce regional disparities. It also continues the Bank’s support for geothermal energy development that started in the 1980s.
“The project supports the climate change and infrastructure development pillars of the government’s Vision 2030 long term development strategy,” said Patrick Nyoike, Permanent Secretary in the Ministry of Energy. “It will strengthen the energy investment programs which have been enabled by the comprehensive policy and regulatory reforms that Kenya has implemented with the Bank’s support since 1981.”
The gap between electricity supply and demand has increased in recent years due to Kenya’s strong economic growth. The supply deficit and costly short-term interventions constrain economic growth and reduce the regional competitiveness of Kenya’s private sector.
Lack of reliable energy lowers the annual sale revenues of Kenyan firms by about seven percent and reduces Kenya’s growth rate by about 1.5 percent, according to the 2008 Africa Infrastructure Country Diagnostic.
“The implementation of this project will enable Kenya to invest in reliable energy sources to support the anticipated economic recovery in the next few years,” said Paivi Koljonen, the Task Team Leader for the Project.
The key components of the project will support activities under the Kenya Electricity Generating Company, the Kenya Power and Lighting Company and the Rural Electrification Authority. These government authorities will also contribute financing to the project.
The other partners in the energy project include the European Investment Bank (EIB), Germany’s KfW, Japan International Cooperation Agency (JICA) and Agence Française de Développement (AFD).