Business
Kenya: Massive expansion of electricity infrastructure underway – country to triple output in 4 years
Olkaria geothermal power generation plant – Kenya. PHOTO/Nation Media Group
(Reuters) – Kenya Power plans to spend 156 billion shillings (US$1.83 billion) over the next 4 years to expand its electricity distribution network in order to keep up with growing demand.
Kenya suffers from occasional blackouts due to supply shortfalls and an aging grid infrastructure.
Kenya Power, which is the sole electricity distribution company in the east African nation, has had to contend with increasing customer connections, particularly in rural areas.
According to the company’s CEO, Ben Chumo, the demand is forecast to rise by 6 percent by June next year.
“We shall primarily be looking at expanding the network,” he told a news conference on Friday.
Lawrence Yego, Kenya Power’s finance manager, said the company planned to raise US$300 million through a bond, while lenders and private stake holders would provide US$150 million.
“We really need to go very fast to grow very fast to be able to catch up with the level of generation and the level of demand that is likely to grow in the market,” he said.
Kenya Power, which serves more than 2 million customers, depends on hydro power stations and geothermal plants, run by the Kenya Electricity Generating Company.
Kenya plans to add 5,000 MW of power supply capacity to the existing 1,664 MW generated by 2017.
Chumo said that in the financial year ending June 2014, Kenya Power expected an additional 540 MW of electricity from new geothermal, wind and diesel power plants, compared with the previous year.
Kenya Power posted a 24 percent drop in pretax profit for its year ended June, hurt by higher financing costs.