Kenya: $133 million loan to fund a project from AFDB

November 21.2014. (HAN) Public diplomacy and Regional Financial investment news. I A $133 million loan to fund a project aimed at improving access to electricity among poor populations in Kenya’s rural areas has been approved by the African Development Bank (AfDB). Only a third of Kenya’s more than 40 million people are connected to the grid, and poor access to electricity as well as erratic supplies are seen as major constraints on economic growth.The government plans to add 5,000 megawatts (MW) of capacity to the existing 1,664 MW by 2017 in a country that relies heavily on geothermal and hydro-electric power. “This project will increase access to modern reliable and affordable energy supply which will in turn encourage Kenya’s transition to green growth,” Alex Rugamba, director of the AfDB’s energy, environment and climate change Department, said in a statement.The total cost of the project, which aims to connect at least 314,200 new customers, is estimated at $147 million, with the government contributing $14 million of that.

New substations and power lines

Early this week, the country’s sole electricity provider, Kenya Power, announced it had secured a $190 million loan from Standard Chartered Bank to upgrade its transmission network.

East Africa’s largest economy suffers from frequent blackouts because of generation shortfalls and an ageing grid Managing director of Kenya Power Ben Chumo said the provider had planned to “make huge investments in acquisition of additional transformers and other construction materials” by the end of next year. “These materials will be used to construct new substations and power lines while at the same time upgrading others to enhance capacity of the power network and improve quality and reliability of power supply to customers.” With the national provider currently serving about 2.8 million customers out of a population of 40 million, Chumo said the upgraded network was expected to cater for an additional 1 million new customers including industrial, commercial and domestic users.