WB in Sh29b Kenya power project

September 1, 2009
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, NAIROBI, Kenya, Sep 1- The World Bank and two other development partners are preparing a Sh22.9 billion ($300million) project to assist Kenya to put up two or three 70 Megawatts geothermal power plants at Ol Karia.

World Bank’s Country Director Johannes Zutt told reporters on Tuesday that the investment which might be implemented later next year would enable the country to exploit clean energy at a time when it is facing an acute power crisis.

“We are working together with the French Development Agency and SIDA (Swedish International Development Corporation Agency). In addition to the work on the power plant, there will be components of our project that will focus on distribution and transmission (to the end user),” he added.

These plans will however have to be presented to the World Bank’s Board by mid next year for approval before the plants can be built.

Mr Zutt said this is part of the measures that the Bank is undertaking to improve infrastructure in the country.

Earlier this year, it approved Sh19.2 billion ($253 million) of additional financing for the rehabilitation of sections of the northern corridor. Another Sh6 billion ($80 million) loan was granted to KenGen and KPLC for distribution and transmission of power.

The bank is also involved in establishing the first modern toll road in the country through which the government can raise finances to maintain and build more roads.

World Bank’s support is however not limited to infrastructure development as it will also assist to tackle the social problems such as food, water shortages and environmental challenges that the country is facing.

The Director told journalists that they were also preparing a new Country Assistance Strategy with Kenya that will guide any further development projects in the coming years.

Although the current strategy expired in June last year, the bank said it is using that period to review their performance.

“We want to consult with all the groups that we partner with to ensure that there’s clarity on what we are doing and get their input what we’ve done well and what we need to improve on,” he explained.

When the plan is finalised, several criteria will be used to determine whether Kenya will receive more development funds that the previous period. However, the director assured that there are no big variations in the amount of money that is disbursed which enables recipient country to plan their budgets appropriately.

Meanwhile, Mr Zutt exuded confidence that the prospects of Kenya’s economic growth look positive despite the crises that it’s currently grappling with.

He said the current investments that are being put in place will pay off soon by contributing greatly to economic growth.

More emphasis on ensuring strong macroeconomic stability and good governance however need to be enhanced, he added.

“The macroeconomic management since the 1990s have been pretty good, there has been a lot of reforms that has made it possible for businesses to expand and create more jobs. The government also has the right attitude to regional integration within the East African Community. Kenya can grow quite strongly but I think there’s still a lot that needs to be done,” he added.

These are rare accolades to the government from one of its key development partners who are known to criticise it for its seeming reluctance to act on governance issues.

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