KPLC boss welcomes competitors

October 9, 2008

, NAIROBI, October 9 – Kenya Power and Lighting Company Managing Director Joseph Njoroge has defended the government’s intention to set up two new companies for electricity transmission and geothermal generation.

The Kenya Association of Manufacturers had raised concerns on Wednesday, saying the two institutions would merely duplicate the mandate of KPLC and the Kenya Electricity Generating Company (KenGen), and would be an extra expense to the tax payer.

However, Mr Njoroge argued that KPLC and KENGEN were not fully owned by the government and thus the need to form completely new entities that could be used to subsidise the ever rising energy costs.

“Both companies are publicly quoted meaning that they are not fully owned by the government. The intention of the government is to inject its own resources to the two so that the burden to the customers is not there,” he explained.

Mr Njoroge was speaking at the launch of the new Rabai Power Plant; a Sh2 billion investment intended to inject an additional 88.6MW to the national grid in the next 16 months.

“It will come in timely to replace the emergency power plants which we are running to the tune of 150MW. I cannot emphasise enough how important this plant will be in meeting the deficit of the power that we so seriously need in this country,” he said.

The plant’s almost 90MW output would be sufficient to provide power to about 40,000 households and will be sold to KPLC, through a 20-year Power Purchase Agreement.The project was awarded on a Build-Own-Operate-Transfer basis through an international competitive bidding process. The new plant will be located 20Km from Mombasa.

Meanwhile Mr Njoroge rejected claims that the commissioning of Independent Power Producers (IPPs) was a contributor to the high cost of electricity in the country.

He explained that it was cheaper to contract the IPPs as opposed to depending on emergency power producers whose cost per unit for generation was higher.

“It’s like running a new technology car as opposed to an old one, which will obviously be expensive in the initial stages but cheaper in the long run.”Njoroge explained.

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