The World Bank says it has approved a 180 million dollars loan guarantee for Kenya Electricity Generation Company to help strengthen the financial position of the state-run company.
The World Bank said in a statement on Monday in Nairobi, that the guarantee would help in long-term commercial financing of up to 300 million dollars to refinance part of KenGen’s existing commercial loans.
The bank said that the loan would also help KenGen to enhance its credit quality and promote further development of renewable energy in Kenya.
Kenya has an installed generating capacity of 2,370 MW and peak demand of about 1,770 MW.
KenGen, which is 70 per cent owned by the government, has an installed capacity of 1,631 MW.
The power firm produces more than 70 per cent of the country’s electricity.
Demand for electricity is growing at about eight per cent a year, according to the government’s transmission and generation plan.
The East Africa’s richest economy is ramping up electricity production and investing in its grid to keep up with the growing demand for power and to reduce frequent blackouts.
It relies heavily on renewable such as geothermal and hydropower.
The World Bank said that the project would help build on those gains and “ultimately lower the cost of electricity”.
Kenya’s energy ministry had on Friday ordered the regulatory body of the sector to review electricity tariffs after persistent complaints by consumers that electricity distributor Kenya Power was overcharging them.