RV to benefit from Kenya power sector savings

June 21, 2010
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, NAIROBI, Kenya, Jun 21- The Ministry of Energy is seeking the Treasury’s approval for the construction of additional transmission lines in parts of Rift Valley using savings it has made from a similar project in Nairobi.

Energy Permanent Secretary Patrick Nyoike said on Monday that the ministry wanted to utilise Sh11.4 billion realised following a downward review of the initial costs for the construction of 400 kilovolt (kV) double circuit power lines between Nairobi and Mombasa. The Treasury had allocated Sh22.9 billion for that project.

“We went to tender and contrary to the original estimates of about £230 million; the overall cost is going to be 50 percent of that. So what we have done is to request the co-financiers to allow us to access the savings from the funds that they have provided,” the PS said.

The funds, which have been provided by the government, Agence Française de Développement (AFD) and Japan International Cooperation Agency (JICA), will be used to construct new 400kV lines stretching 80 kilometers between Suswa and Isinya.

The PS said the government had already set aside money to compensate people who would be displaced during construction of the new lines.

“To show commitment, we have also deposited Sh1 billion for right-of-way acquisition and the resettlement of any affected families,” he explained.

Mr Nyoike said these projects aim to ensure the availability of alternative supply lines so that power is not switched off when the Kenya Power and Lightning Company (KPLC) is undertaking routine maintenance of existing power lines.

“I’m looking to the day, probably five years from now, when it shall not be necessary to switch off customers in Nairobi to enable KPLC to carry out any maintenance or attend to any major breakdowns,” he said in reference to the practice which has become a norm.

These projects which are being carried out under the Electricity Expansion Program are also designed to enable the country increases access to electricity from the current 25 percent of the population. The connectivity is below average for Africa and in developing economies where access is about 36 percent thus the need to source for more funding from Kenya’s development partners.

The PS who spoke during the official commissioning of the Nairobi-Mombasa Fibre Optic cable which was financed by the European Investment Bank (EIB) urged the institution to assist the country to put up a vibrant, reliable and secure power system.

“I know the ceiling (funding) for this year for Kenya has been realised and therefore it cannot be exceeded and that’s why we are getting £119 million. In the next operation, we would like to request EIB to consider helping us to construct a 220kV ring for Nairobi,” Mr Nyoike told visiting EIB Vice President Plutarchos Sakellaris who was present at the function.

In response to the PS’s request, Mr Sakellaris said they were looking at other means of financing projects in Kenya particularly in the energy sector.

“The PS has mentioned how we are reaching the country’s limit but I can assure you that we are working on that and we have already looked at alternative ways that we can do that,” he said.

He said EIB has over the past five years invested £900 million in Eastern and Central Africa out of which 25 percent has gone into financing investment projects in Kenya.

Mr Sakellaris pledged that the bank would also disburse some of the funds it has committed for the implementation of projects in the energy sector.
 

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