NARIOBI, Kenya, Apr 13 – Kenya on Tuesday signed a consessional loan of Sh7.5 billion from China for the Olkaria IV Geothermal Field Production Wells Drilling Project.
Finance Minister Uhuru Kenyatta said the loan would be used to drill 26 steam production wells to boost geothermal power production in the country.
Mr Kenyatta signed the agreement with visiting Vice-President of the Export-Import Bank of China Zhu Hongjie at the Treasury office.
He said once the project is complete the country will receive an additional 140 megawatts which will help reduce the current power deficit.
“This support will be utilised to drill steam production wells and thereby enhance the capacity to harness the country’s geothermal power potential which is estimated to be 7,000 megawatts,” he said.
The Minister recognised energy shortages affecting many developing countries saying Kenya was not an exception as it could not satisfy the demand for energy.
Mr Kenyatta said there was need for the government to explore other sources of power citing the high fuel prices and over dependence on hydropower production.
He noted that the Olkaria IV project will help reduce negative effects of climate change and divert the country from relying entirely on weather power sources.
At the same meeting, Energy Minister Kiraitu Murungi asked for further financial assistance for the purchase of seven additional drilling rigs.
Already the ministry has submitted a request for the purchase of three rigs at a cost of Sh7.6 billion.
“This will enable us maintain the drilling momentum we have already developed in an effort of shifting our power production mechanisms,” Mr Murungi said.
He added the ministry required an additional Sh23 billion to drill 60 more geothermal wells.
Meanwhile, President Mwai Kibaki held talks with Mr Hongjie who paid a courtesy call to his Harambee House office.
During the meeting President Kibaki hailed the strong bilateral ties existing between the two countries and the continued support that China has extended to Kenya.
The President noted that under the Forum for China Africa Cooperation (FOCAC) platform, China had enabled Kenya boost the pace of implementing vital development projects.
He affirmed that due to the close economic ties existing between the two nations, critical projects on infrastructure had been implemented and others are at advanced stages.
The Head of State assured Mr Hongjie that Kenya was committed to providing a strategic gateway for serving the entire East African region and beyond.
He noted that Kenya was determined to develop the Port of Lamu and establish a standard-gauge railway from Lamu to serve the Northern parts of the country, the Southern Sudan and Ethiopia.
President Kibaki appreciated the grant extended to Kenya for the construction of a 300 bed hospital facility in Nairobi’s Eastlands area. The President said that the hospital would serve the densely populated eastern parts of the city.
Among the ongoing projects financed by the People’s Republic of 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 invloves the construction of extra lanes from Kenyatta University to Thika town intended to improve traffic flow along the route.
Recently the National Youth Service (NYS) obtained modern machinery and equipment worth Sh4.3 billion concessionary loan. The equipment will greatly assist in maintenance and construction of the country’s road network.
The meeting was attended by Deputy Prime Minister and Minister for Finance Uhuru Kenyatta, Head of Public Service and Secretary to the Cabinet Amb Francis Muthaura among other senior government officials from line ministries.