1 June 2010 – Kenya has received approval for a $330 million loan from the World Bank to expand the Kenyan national grid and support geothermal power generation.  Kenya is seeking to diversify its sources of electricity and hopes to lean more on geothermal and wind energy in future.

"The supply deficit and costly short-term interventions constrain economic growth and reduce the regional competitiveness of Kenya’s private sector," the World Bank said in a statement.

"The gap between electricity supply and demand has increased in recent years due to Kenya’s strong economic growth and inadequate investment in power infrastructure," it said.

The loan is a part of $1,4-billion being invested in the electricity sector by the government, the World Bank and other development partners.

According to the World Bank, the lack of reliable energy lowers the annual sales revenues of Kenyan firms by about 7% and reduces Kenya’s growth rate by about 1,5% annually.

The country’s main electricity generator, KenGen, generates about 1 000 MW of electricity – 80% of Kenyan demand – with 700 MW of that coming from dams. It was forced to shut down a 40 MW hydro generation plant last year by drought, causing outages.

"(This loan) will enable Kenya to expand geothermal power generation as part of its green energy development strategy," the World Bank said.

Officials estimate Kenya can generate 7 000 MW from the vast reserves of steam that lie under the Great Rift Valley running across the country. Kenya plans to raise the electricity generated from geothermal to a minimum of 5 000 MW by 2030.