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Kenya to spend Sh162b for energy development

NAIROBI, Kenya Feb 16 – The government says it has mobilised an estimated $2billion (Sh162.6 billion) to fund energy development and power distribution in the country.

The money will go into funding construction of more than 2,700 kilometres of transmission lines in different parts of the country as well as fund the rural electrification program.

An estimated $1.4 billion (Sh113.8 billion) will go into generation of 280 megawatts of power at the Olkaria geothermal fields.

Making the announcement, President Mwai Kibaki said the projects were targeted at increasing and improving the power situation arguing it was a key driver of economic development.

"With completion of these projects by 2013, the power quality in the country will improve substantially," President Kibaki said.

The Head of State said the projects also aim at getting an additional one million new customers connected to the national power grid.

Part of the money will also be used in upgrading the Kindaruma power station from 40 to 72 megawatts.

Energy Minister Kiraitu Murungi said his ministry had an ambitious target of scaling up electricity access to 50 percent by 2020 and 100 percent by 2030.

"This is attainable given that high voltage power grid is within reach of 75 percent of the population and therefore what is required is deepening the connectivity rate," Mr Murungi said.

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They were speaking during the commemorative listing of the Kenya Power and Lighting Company\’s (KPLC) 488.6 million new shares at the Nairobi Stock Exchange following a successful rights issue.

The power distribution company managed to raise Sh9.52 billion that will be used in upgrading its aging distribution system.

The country has been forced to endure regular power outages owing to the rundown transmission system and insufficient power generation.

The Energy Ministry has set a 2015 target to inject an additional 1,800 megawatts of power to the national grid by commissioning geothermal, wind, coal and thermal plants.

Mr Murungi also said KPLC would need to increase the number of transformers to ease distribution.

Last week, KPLC announced it was considering setting up a transformer manufacturing plant to help it cope with the expected surge in energy demand.

The company advertised an expression of interest for consultants to carry out a feasibility study for the manufacture and assembly of distribution transformers.

"There is therefore need to investigate if the overall economy and the entire east African region can support the establishment of a transformer manufacturing and assembly plant in Kenya," KPLC said last week.

To fast track economic development, the Energy Minister said there was need to increase the per capita consumption of power from 145 kilowatt hours to 1,000-kilowatt hours.

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"We require rapid expansion of the entire electricity supply chain if we are going to achieve this growth," he said.

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