Kenya to import energy from Ethiopia

Energy from EthiopiaThe Kenyan government has received a KSh9.8 billion loan from the African Development Bank (AfDB) for investments in energy infrastructure between Kenya and Ethiopia. Kenya plans to import energy at a rate of Ksh.6.08 per kilowatt hour from Ethiopia.

The fund will go towards the construction of a 1,045 kilometre-long electricity highway between the two countries.

The high-voltage energy lines will allow Kenya to import power for plugging a shortage that has been created by low local generation capacity against growing demands.

Njeru Gthae, Finance Minister said that the project will facilitate export of surplus power from Ethiopia to Kenya and will increase power supply in Kenya.

The AfDB loan has a grace period of 10 years and a maturity period of 30 years. The country will repay the loan at an interest rate of 0.7 percent during the grace period and of 1 percent after the grace period.

The World Bank signed a deal to inject Ksh37.5 billion into the same project. These funds will be extended in a syndicated loan which will attract an interest rate of 0.75 percent.

The government has made numerous efforts to increase the country’s energy capacity with the commissioning of the Sh10 billion Kipevu III Power Plant in Mombasa that adds an extra 115 Megawatts (MW) to the national grid.

The power import project which is set to be completed by the end of 2016 is one of the many projects that is being undertaken by countries in East Africa to help trade of power in the region. The pool consists of all the EAC member states apart from Ethiopia, Djibouti, and Sudan.

The current installed power capacity in Kenya stands at slightly above 1,500 megawatts, with less than 30 per cent of the country’s population having access to electricity.

President Mwai Kibaki recently launched the construction of the 280 Megawatt geothermal project at Olkaria geothermal field which is scheduled for commercial operation by September 2014.

AfDB extended Ksh3.7 billion to the Kenyan government for investment in higher education training and capacity development.

The minister of higher education, Margaret Kamar said that the money would be used to establish a scholarship fund for 750 engineering students in the petroleum and mining sector.

She said that there was a need to improve human resource capacity in developing areas such as oil and gas. At present the country has a shortfall of about 30,000 engineers and 90,000 technical professionals.

Image courtesy: FreeDigitalPhotos.net

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