IFC to in­crease power gen­er­a­tion in Kenya

The Pak Banker - - Front Page -

WASH­ING­TON

IFC, a mem­ber of the World Bank Group, is in­vest­ing €20.7 mil­lion and is ar­rang­ing €20.7 mil­lion loan from Stan­dard Bank to fi­nance the de­vel­op­ment of a power plant to meet the en­ergy needs of Kenya to fuel its econ­omy and cre­ate jobs and boost growth.

In­de­pen­dent Power Project (IPP) by Gulf Power Ltd. Near Nairobi, Kenya, will use the loan to cre­ate and sell all out­put to the na­tional dis­trib­u­tor, Kenya Power and Lighting Com­pany, in­creas­ing the sup­ply of elec­tric­ity in the coun­try.

The World Bank es­ti­mates that power short­ages cur­rently cost the Kenyan econ­omy two per­cent of GDP growth.

The 80 megawatt Gulf Power plant will use heavy fuel oil (HFO), to help di­ver­sify Kenya's elec­tric­ity away from hy­dropower. Dur­ing times of drought, when hy­dropower drops in sup­ply, Kenya has had to turn to costly emer­gency power. HFO power plants are a quick and vi­able op­tion to ad­dress the en­ergy deficit in Kenya, given the rel­a­tively long de­vel­op­ment pe­riod of other sources like geo­ther­mal en­ergy and coal.

The project is a re­sult of the Kenyan gov­ern­ment's ten- der of three power plants in 2009, to en­cour­age pri­vate sec­tor par­tic­i­pa­tion in the elec­tric­ity gen­er­a­tion. Gulf Power is owned by Gulf En­ergy Lim­ited, an oil and gas trad­ing com­pany, and by Noora Power Lim­ited; both com­pa­nies in­cor­po­rated in Kenya. Ear­lier this year, IFC also in­vested in an­other win­ning bid­der for the IPPs - Thika Power Ltd.

"In­de­pen­dent Power Plants can as­sist gov­ern­ments in im­prov­ing sup­ply and qual­ity of power in a coun­try", said Fran­cis Njogu, CEO of Gulf En­ergy Ltd. "By loan­ing €41.4 mil­lion to this project, IFC and its part­ner in­sti­tu­tions are fill­ing a fi­nanc­ing gap as Kenya seeks to trans­form its power gen­er­a­tion and dis­tri­bu­tion net­work."

Ou­mar Seydi, IFC Di­rec­tor for East and South­ern Africa said, "As de­mand for en­ergy in­creases in Kenya; in­de­pen­dent power projects can help the gov­ern­ment boost elec­tric­ity sup­ply and fuel the na­tion's econ­omy. Gulf Power's choice of heavy fuel oils will di­ver­sify Kenya's en­ergy sources, mak­ing power gen­er­a­tion more sta­ble." In­creas­ing power gen­er­a­tion is at the heart of both the Kenyan Gov­ern­ment and IFC's strat­egy for in­fra­struc­ture de­vel­op­ment.

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