The World Bank has approved a Sh20 billion fund for the re-carpeting of the Northern Corridor that links Kenya to the landlocked countries in the Great Lakes region of East and Central Africa.

This approval increases World Bank’s support for the Northern Corridor Transport Improvement Project (NCTIP) to Sh36.75 billion, up from the initial financing of Sh16.5 billion. The Bank’s Executive Board approved the initial funding in June 2004.

The approval of the funds to be used for the improvement of the Mau Summit to Kisumu road, says Finance Minister Uhuru Kenyatta, is a clear indicator that Kenya is still considered a viable destination for donor funding.

“Despite the hard economic times its not all gloom as some parties may be implying,” The finance minister said Friday.

At the same time the Kenyan government signed funding agreements for two loans amounting to Sh4.52 billion and Sh6.87 billion from the French government. The soft loans will be used facilitate the erection of the Nairobi-Mombasa very high voltage line and improve the Mombasa water and sanitation services.

Speaking during the signing ceremony Mr Kenyatta said the existing transmission infrastructure between Mombasa and Nairobi could be overstretched in the next two years hence the need to have them replaced.

“The new connection will also facilitate the interconnections with Tanzania, Zambia and SouthAfrica,” Mr Kenyatta said.

French Ambassador to Kenya Elisabeth Barbier said during the ceremony that the French government had increased their allocation of funding to Africa to Sh14.4 billion.
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East Africa states pursue joint power supply plan






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Powerlines. The review, which is expected to last 15 months, will enable Kenya to connect her national power grid with those of neighbouring states with surplus power.


East African countries are drawing up a joint plan to boost electricity supply across the region in the face of acute shortfalls sparked by poor rains.

They are aiming to create a power pool through the aggressive tapping of alternative power sources under the East African Power Master Plan (EAPP).

The proposed East African Power Master Plan (EAPP) is to be updated to include an earlier study by Kenya , Uganda and Tanzania, the original members of the East African Community (EAC).

The African Development Bank (AfDB) will finance the review to the tune of $1.2 million (Sh96 million) to update the EAC’s study of 2005.

The review, which is expected to last 15 months, will enable Kenya to connect her national power grid with those of neighbouring states with surplus power.

The plan advocates for exploitation of alternative sources to meet arising demand.

“The EAPP envisages a time frame of up to seven years to a fully-fledged regional power system, with the creation of a power pool as a central feature,” said Mr Magaga Alot, EAC’s spokesperson.

EAPP, with its secretariat in Addis Ababa, comprises Egypt, Sudan, Ethiopia, Kenya, Rwanda, Burundi and the Democratic Republic of Congo.

While Tanzania and Uganda are not members of EAPP, it is understood that they have started to participate in some of the activities. Tanzania has an excess of 350 megawatts but it cannot be distributed to other countries because there is no interconnection in the region.

A transmission line connecting southern Ethiopia and Mt Longonot will be constructed to tap 500MW of hydro power and help narrow current deficit of national power requirements.

Construction follows completion of a feasibility study by a coalition of donors to establish the viability of the project to interconnect the national grids of the two countries. The study was undertaken by German power consultants Fitchner GMBH at a cost of Euros 1.7 million (about Sh17 million).


Feasibility study
“The feasibility study for a transmission line from Ethiopia to Nairobi is ready. This is one of the interconnection projects for the Nile Basin countries,” said Ms Domina Buzingo, AfDB’s country representative in Nairobi.
The Congo River has vast hydro potential enough to meet requirements for all the East and central African economies. Kenya also intends to tap into the southern Africa Power Pool, according to Energy minister Kiraitu Murungi.

“Procurement of consultancy services is at an advanced stage as both technical and financial evaluations have been completed.

A ‘No objection’ for the final evaluation is awaited from the AfDB after which consultancy services will be awarded,” says a brief seen by the Business Daily.

While interconnection is believed to be the least cost solution for power supply, geothermal is the most reliable form of renewable energy and hydro power is the cheapest source of electric power.

The potential in geothermal alone is 7,000 MW while huge potential is in renewable, solar and wind. “Regional interconnection is the way to transform our economies and mitigate power shortage,” said infrastructure expert, Dr Eric Aligula.

Dr Aligula said high cost of fuel and over reliance on hydro power generation makes it necessary to diversify to other cost effective forms of energy as well as conservation for both domestic and industrial use.

“Geothermal is the key to affordable electricity and in the long run it will reduce the cost of electricity in the country,” said Dr Aligula of the Infrastructure and Economic Services Division at the public policy think tank - the Kenya Institute for Public Policy Research and Analysis (Kippra).

In April, the EAC member states announced they will spend about $1.8 billion on the implementation of the power master plan in the next seven years.

Of this amount, some $1.2 billion will be used for power generation while $600 million( about Sh48 billion) will be spent on power transmission projects

Projects to ease power shortfalls
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Technicians from the Kenya Power and Lighting Company install a new transformer. Photo/FILE
By NATION Reporter Posted Sunday, May 10 2009 at 16:51

Current power shortfalls are set to ease with the provision of a Sh5.8 billion loan to the government by the African Development Bank, for a 450 kilometre-long power transmission project between Mombasa and Nairobi.

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The project, designed to facilitate the evacuation of power generated in the Mombasa area to Nairobi and eventually into the national grid, will also help Kenya meet future demand growth for electricity.

“The project will involve the construction of a 450 kilometre 400 kV double-circuit transmission line between Rabai (Mombasa) and Isinya (60km from Nairobi),” read a statement from the financial institution.

The loan will also assist in the construction of new transmission lines from Isinya to the Embakasi substation in Nairobi and meet part of the costs for the expansion of a 19km 220 kV double-circuit line between the Rabai and Embakasi substations and the installation of shunt reactors at Rabai.

The completion of the project is expected to initially enhance the transfer capacity to about 330 MW with the possibility of an upgrading of up to 950 MW, as national demand for power increases. Meanwhile, to facilitate constituencies that are not fully covered by the national grid with access to electricity, the government also plans to construct 33 new diesel power stations.

Plans are also underway to construct several other electricity stations that are either powered by wind or solar energy, technologies that are not only renewable and cheap in the long run but also a lot cleaner for the environment. Twenty-four constituencies have already been identified as areas where the facilities will be set up, according to a draft rural electrification master plan.

The plan, obtained by the Nation on Sunday, names the constituencies as Turkana North, Central and South, Samburu East and West all of which are in the Rift Valley Province. There are also Lamu, Bura, Lamu East and Galole constituencies in Coast Province.

Others are Dujis, Mandera Central, West, East and South, Lagdera, Wajir North and West, Fafi and Ijara constituencies in North Eastern Province, North Horr, Isiolo South, Laisamis, Moyale and Saku constituencies in Eastern province.

Already, says the plan being developed by a German consulting company MVV Decon, the government has already tendered for eight of these power stations. “The generation mix of decentralised rural schemes will in the next five years supply an additional peak demand of 41 megawatts including electricity generated by solar and wind energies,” it says.

The government also plans to extend several power grids in the remaining 177 constituencies, a process likely to cost Sh120 million over the next five years. It is expected that when this is implemented, some 902,000 Kenyans in the rural areas will have access to electricity.

Overall, the master plan envisages that within the next 10 years, the government will provide electricity access to about one million households at a cost of Sh112 billion. This year alone, the government expects to connect some 65,000 new customers to the national grid, an investment that requires Sh16 billion.

Energy PS Mr Patrick Nyoike said recently that the move to scale up Kenyan’s access to electricity came out of the realisation that many parts of the country were not connected to the grid. It is estimated that only 10 per cent of Kenya’s approximated 38 million people have connection to electricity, while accessibility stands at about 63 per cent.

“These levels of access to electricity are not encouraging considering that average rural connectivity levels for the developing world is about 40 per cent,” said the PS. Mr Nyoike added that some African countries have higher connectivity levels, citing South Africa, Morocco, Tunisia and Ghana. He said that with the establishment of the Rural Electrification Authority, the target for rural electrification

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Construction of a Sh20 billion electricity transmission line is set to commence after the Government secured financing for the project.
Kenyahttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.standardmedia.co.ke/business/InsidePage.php?id=1144026663&cid=14&#) Electricity Transmission Company said it has secured a loan facility for construction of the high voltage 400 kV line from Mombasa to Nairobi.
The funds came from the African Development Bank, France Development Agency and the European Investment Bank with each availing Sh6 billion. The Government also committed an additional Sh6 billion.
The money is intended to finance the line that would be used to transport thermal power being generated at the newly commissioned Rabai power station that has a capacity of 50 MW.
The funds would also be used to construct a 220-kv line to connect a new thermal power planthttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.standardmedia.co.ke/business/InsidePage.php?id=1144026663&cid=14&#) being built in Embakasi by Tsavo Power with a capacity of 56 MW to the national grid.
Ketraco has already contracted Parsons Brinckerhoff of United Kingdom as the project consultant and has put out bids for the design, manufacture, supply and erection of thelines.
New embakasi plant
"We intend to open the bid in January and award the contract in March and we anticipate it will take 27 months to complete the job," said Andolo Ambasi, the Project leader.
Construction of the Mombasa - Nairobi transmission line has been identified as one of the key projects that would ensure constant supply of power for the capital city.
It comes soon after the country emerged from a biting power rationing program due to over-reliance on hydro generation.
Though the line would guarantee uninterrupted thermal supply, observers are weary the country is committing to relying on the expansive mode of power generation.
Diesel verses Water
Due to a prolonged drought over the past three years, burning of diesel has replaced hydro as the main electricity generation form.
With the unpredictability of crude oil priceshttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.standardmedia.co.ke/business/InsidePage.php?id=1144026663&cid=14&#), there are fears Kenyans and manufacturers would continue paying a high price for power.
The lines are part of huge investments being undertaken in transmission and distribution facilities over the next six years in efforts to meet power demand expected to increase by an average of eight per cent annually.
Other transmission projects to be undertaken include 1,500 km of 132 kv line to support the rural electrification programme and the 1,100 km Kenya-Ethiopia inter-connector that will enable the country buy electricity from Ethiopia.

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Plagued by incessant power shortages due to unreliable rainfall that feeds the country’s hydropower plants, the Government is turning to alternative sources of power production.
Ahead of the UN’s climate change (http://www.standardmedia.co.ke/InsidePage.php?id=1144029679&cid=4&ttl=State%20bets%20big%20on%20clean%20energy#) summit in Copenhagen, many believe power shortages are more than an immediate crisis.
Even the current rains have not eased the burden off Kenyans’ shoulders as electricity bills continue to soar.http://www.standardmedia.co.ke/images/saturday/nhcap051209_01.jpgGeothermal steam field at Olkaria in Naivasha.
[ERICK WAMANJ: STANDARD]

But this may soon change as the newly created Geothermal Development Company (GDC) — a parastatal in the Ministry of Energy — is promising to turn the energy sector around as early as next December.
Energy Minister Kiraitu Murungi says the country’s electricity base load will shift from hydro-based to geothermal in the next 10 years.
"With 7,000 MW geothermal potential, why should Kenyahttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.standardmedia.co.ke/InsidePage.php?id=1144029679&cid=4&ttl=State%20bets%20big%20on%20clean%20energy#) not be a leading producer of geothermal electricity?" poses Kirairu.
His sentiments are echoed by Energy PS Patrick Nyoike.
A break with the past
"We are at the tail end of hydropower production. We can only add another 75 MW from this source to the national grid and it is important to explore alternative sources," says Nyoike.
Already GDC has mapped out potential areas to drill for geothermal steam. Last week, it signed a contract to sink about 10 wells at Olkaria Domes in Naivasha beginning January, next year.
The 10-month project is expected to supply electricity equivalent of 140 MW to the Olkaria IV power planthttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.standardmedia.co.ke/InsidePage.php?id=1144029679&cid=4&ttl=State%20bets%20big%20on%20clean%20energy#).
GDC Managing Director Silas Simiyu says once this resource is tapped, the cost of electricity is expected to reduce by about half.
"It is sad that we have suffered heavy electricity burden over and over. However, this is bound to change once we start drilling. GDC is committed to provide green, reliable and affordable electricity such that every village in this country will be lit, and any industrialist will be assured of steady supply," says Dr Simiyu.
He says GDC has entered into agreement with KPLC to "evacuate the power" from the geothermal sites. KPLC, through the Kenya Electricity Transmission Company, will install transmission lines to tap power from the geothermal plants.
In the short term, the company plans to produce more than 200MW of electricity beginning next year.
"Ours is a paradigm shift on tapping geothermal resources. Our model of early generation will shrink the gestation period of electricity production from seven years to six months. At this rate, we will be providing 200MW to the national grid," Simiyu told a Green Energy Conference in Nairobi last week.
And he bets on the geothermal power to lead the way in the Government’s ‘going green strategy’, which will earn the country carbon credits.
"Today the world is going green and we are firmly committed to contribute to this global agenda. Clean, renewable and sustainable energy is the only way to save planet earth from collapsing. That Kenya is endowed with abundant geothermal resources is a privilege. All our efforts should now be channelled towards this environment-friendly source of energy," he says.
Studies show Kenya has a geothermal potential of 7,000 MW. The geothermal fields are strewn in the Rift Valley and parts of western Kenya.
But even with this enviable potential, the country exploits a mere 167 MW from plants situated in Olkaria.
If the Government taps this potential, experts say at least 70 per cent of the country will have electricity.

^^
That's alot of steam in that pic.

Kenya has awarded Mott MacDonald Ltd, a British company the contract to study the viability of building storage and distribution facilities of liquefied natural gas (LNG) in Mombasa.

The study, financed with part of the $153 million Energy Sector Recovery Project funded by the World Bank, seeks to identify Kenya’s potential of LNG for industrial use and power generation.

Liquefied natural gas is expected to be a substitute fuel for some of the existing and planned thermal generation facilities in Mombasa if the conversion is economically justifiable.

Project coordinator Meredith McArthur said the Ministry of Energy has engaged Mott MacDonald to carry out the feasibility study on an LNG re-gasification terminal near Mombasa.

Site location

“The project commenced on November 2, 2009. Phase one covers natural gas demand assessment, site location of LNG terminal, financial and economic evaluation among others,” he said.

Phase two spans environmental and social impact assessment and resettlement action plan, emergency response and disaster management plan, institutional and organisational study.

Mott MacDonald said LNG import terminals are being developed over a wide rage of sizes from less than one million to over 10 million tonnes per annum of gas.

Send-out gas is typically used for end-users like power generation, industrial fuels and feedstock for manufacture of other chemicals. LNG benefits include lower air emissions compared with other fossil fuels.

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Kenya signed a Sh23.4 billion loan with Japan on Tuesday to help develop the geothermal energy sector in east Africa's largest economy, its finance minister said.

"We have signed exchange notes ... for a loan amounting to Sh23.4 billion," Finance Minister Uhuru Kenyatta told reporters.

Energy Minister Kiraitu Murungi said Kenya expected to generate at least 500 megawatts of geothermal energy by 2030.

The loan will help fund the construction of two new units at the Olkaria I geothermal plant near Naivasha, which together will generate an additional 140 MW, Japan said.

Japan also said the Kenya Electricity Generating Company (KenGen), the country's main energy generating firm, planned to expand a separate geothermal station at Olkaria and build new one.

Kenya, which suffers droughts, relies heavily on hydropower, but is increasingly turning to geothermal energy to boost power production.

Businesses say frequent blackouts increase the cost of doing business in Kenya.

Geothermal energy uses the steam generated by underground water heated by the earth's core to spin turbines that in turn generate power.

Although cheap and renewable, the start-up cost for geothermal plants is high compared with other sources like hydropower.

Kenya has received a Sh7.5 billion loan from the Export-Import Bank of China to drill geothermal wells for production of 140 megawatts of energy.

In what appears to a shot-in-the-arm for the country to pull itself out of the unpredictable and costly hydropower generation, the money will be used to explore 26 steam production wells at the Olkaria IV geothermal field in Naivasha.

Kenya has geothermal power potential estimated at 7,000 MW and hopes to tap 5,000 MW of it by 2030.

“In consideration of the present energy situation, high fuel prices and over dependence on hydropower production, the Government of Kenya now recognises the need to diversify sourcing of power generation through environmentally friendly sources,” said Finance minister Uhuru Kenyatta on Tuesday during the signing ceremony.

China is one of Kenya’s main bilateral partners with cumulative development assistance of Sh29.45 billion.

Last month, Kenya received a Sh23.4 billion loan from Japan for another 140 MW at its Olkaria I plant.

Earlier in the day, the bank’s vice president Zhu Hongjie held talks with President Kibaki, where it was disclosed that under the Forum for China Africa Co-operation platform, China had enabled Kenya boost the pace of implementing vital development projects.

Port of Lamu

Mr Kibaki said Kenya is determined to develop the Port of Lamu and establish a standard-gauge railway to serve the Northern parts of the country, the Southern Sudan and Ethiopia.

Among ongoing projects financed by China include the Nairobi Eastern and Northern By-Passes at a cost of Sh9.5 billion.

The Kenyatta University to Thika Road that is part of Nairobi-Thika Highway Improvement Project is being implemented at a cost of Sh10.6 billion.

It involves the construction of extra lanes from Kenyatta University to Thika Town intended to improve traffic flow along the route.
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The World Bank will extend a Sh10 billion loan to help improve the Kenya Power and Lighting Company (KPLC) infrastructure.

The facility will also help the electricity distributor curb regular power outages.

KPLC Managing Director Joseph Njoroge told The Standard the loan will enable the firm improve the power distribution system across the country.

Mr Njoroge said the cost of electricity could gradually drop in the coming months following a reduction in the fuel cost charge in the consumers power bills as the country cuts down on thermal generation.

"Fuel cost has been coming down because of more use of hydro-generation and retirement of some thermal emergency power," said Njoroge.

He said the fuel cost charge component on the electricity bill has reduced from Sh7.49 last month to Sh6.72 this month and is expected to continue on a downward trend in the coming months.

Emergency power

This followed the retirement of 150 MW of emergence power due to rising water levels at Seven Folks cascade.

Power generator KenGen is expected to cut thermal generation of emergency power by 60 MW this week.

Njoroge said the loan facility would be used to put up electricity sub-stations in various parts of the country, automate the operations and improve the distributions lines by constructing underground systems.

He said the projects are part of a five-year upgrade programme the firm will undertake at a cost of Sh40 billion ($500 million).

"For many years KPLC did not invest in infrastructure and that is why we have unreliable infrastructure," said Njoroge.

He said KPLC’s growth in profitability, against a decline in KenGen’s earnings has been achieved over a period of time, and is necessary for the firm’s sustainability.

KPLC needs profits to access credit from financers. For instance, one of the WB’s conditions for the loan facility was a requirement that KPLC must contribute 75 per cent.

Last month the company announced a 31 per cent increase in pre-tax profit from Sh2.1 billion to Sh2.8 billion for six months ended December last year.

"We need to make profits to access lender money and ensure as many Kenyans as possible have access to electricity," he stated.

During this period, KPLC bought 1,606 million units of electricity from KenGen compared to 3,295 million units sold.

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