World Bank approves Sh18 billion KENGEN guarantee, aims to reduce cost of Power

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The World Bank  has approved a $180 million ( Sh18.03 billion) to strengthen the financial position of Kenya Electricity Generation Company Limited  and build energy security for all Kenyans.

The funds are aimed at significantly improving electrification bringing much needed energy to millions of households and businesses.

Ultimately, these is intended to  lower the cost of electricity – critical to power Kenya’s manufacturing and growth aspirations.

“Affordable and accessible electricity is essential to ensuring that Kenyan businesses remain competitive in the international market, allows women and youth to run their businesses safely late into the night within informal settlements and strengthens citizen contribution into growing Kenya’s economy,” said Diarietou Gaye, World Bank Country Director for Kenya. “This is what Kenya needs if it is to achieve a middle-income economy status by 2030.”

The funds are aimed at significantly improving electrification bringing much needed energy to millions of households and businesses.

KenGen today manages 70 per cent of Kenya’s generation capacity of 1,631 megawatts making it one of the largest in East Africa.

The funds further supports KenGen in raising up to $300 million ( Sh30 billion) in long-term commercial financing to be used to refinance an expensive portion of KenGen’s existing commercial loans, enhancing KenGen’s credit quality and promoting sustainable development of renewable energy in Kenya.

“This IDA Guarantee will solidify KenGen’s financial position as the company pursues its aspirations towards geothermal development, building energy security for all Kenyans, and becoming a sustainable energy hallmark in Africa,” said Mariano Salto, World Bank Energy Economist and Task Team Leader.

The KenGen Guarantee Project is an addition to the application of the World Bank Group’s Maximizing Finance for Development approach within Kenya’s energy sector in the past 20 years.


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Muhatia
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