Kenya’s main electricity producer is stepping up its efforts in ensuring it upgrades the country’s power distribution systems.
The East African country is looking at increasing its national power output to 5,000 megawatts (MW) by 2016 in order to spur industrial growth. The Kenya Electricity Generating Company (KENGEN) which is responsible for the production of 80 per cent of the power consumed in the country has already added more geothermal power to the national grid. The firm added 210MW earlier this week and will add a further 280MW on Friday.
In an interview with CNBC Africa, Albert Mugo, the managing director at KENGEN said the 5,000MW additional to the grid are an ambitious plan. Nonetheless, KENGEN is working towards it to bring different types of generation.
“KENGEN is committed to put in about 844MW, 700 of which is geothermal, 120 are wind and about 24MW from hydro. We have already seen 400MW of that and in the next one month or so, we will be adding another close to 100MW,” Mugo said.
The 5,000MW power policy will help meet Kenya’s growing demand for electricity through geothermal sources in order to transform it into an industrialised country.
“One of the objectives of the 5,000 plus MW increase in capacity is actually to bring down the cost of electricity. In Kenya today, geothermal power is the least cost means of supplying electricity to the nation and in the equation to the 5,000MW geothermal is contributing about 1,700MW and as we bring in more geothermal we will see that displacing the expensive diesel power the cost of electricity will come down,” Mugo explained.
The Kenyan government said that it will spend about 2 billion US dollars in the medium term to upgrade its power distribution systems. The government identified energy as one of the infrastructural enablers of growth and macroeconomic stability, equity among others.
Earlier in the year, the power producer announced its intentions of to raise 15 billion Kenya shillings through a rights issue to finance expansion of its power generating capacity.
“We have engaged the government because as you know the government owns 70 per cent of the shares in KENGEN, so any rights issue would depend a lot on how the government intends to take its rights. The government indicated before the end of November it will be able to give us the decision that will enable us to prepare the information memorandum for submission, to the Capital Markets Authority.”