HomeRegional NewsEast AfricaKenya committing to private sector power in bid to halve prices

Kenya committing to private sector power in bid to halve prices

Kenya is increasingly inviting bids from private investors to take up power generation projects with hopes of transferring the benefits of bulk power production to consumers through reduced electricity tariffs. While it wishes the private sector to increase its role in Kenya’s electricity sector the country’s government plans to cap prices to ensure electricity cost comes down. This is part of efforts to lower the cost of power in the country from US18c − US19c/kWh to US9c – US10c/kWh.

As reported by The Standard of Kenya projects already handed to the private sector include generation of 900 to 1,000 MW of coal power at Lamu and generation of 700 to 800 MW of power using liquefied natural gas at Dongo Kundu in Mombasa. Another such project is for the production of 900 to 1,000 MW of coal generation at the Mui Basin in Kitui County.

Kenya’s government plans to add 5,000 MW of power to the national grid in the next 40 months through a mix of geothermal, coal and liquefied natural gas projects, which are relatively cheaper compared to heavy fuels and diesel.

According to John Omenge, chief geologist at the ministry of energy, “We are inviting the private sector to come and produce power. Our job will now be to provide the right environment for the investors. The government is moving away from power generation to allow private sector firms do the work,” he told The Standard in an interview.

Omenge notes that the inclusion of the private sector in power production will reduce the current power shortage and reduce the cost of electricity by 50%. Current installed power capacity is estimated at 1,700 MW.

“We have never had enough power in this country. We have always had a deficit,” he says. For the Kenyan economy to grow at the rate of 10% a year the country requires between 10% and 15% of excess power to sustain the growth momentum.

“These energy projects are now being advertised and people are bidding,” Omenge says. The country’s emergency power supply estimated at 120 MW has since dropped after the shutting down of one of the independent power producers, Aggreko, which was generating 90 MW for the national grid.