Kenya power has set aside US$600m for the development of major infrastructure projects including new substations and transmission lines, funded by a mixture of debt and internal revenues.
Kenya Power will be funding the huge capital expenditure through loans amounting to US$425m, (Sh37bn) of which US$126m (Sh11bn) will come from the China Exim bank in a deal negotiated through the Ministry of Energy. The rest of the loan is expected from a consortium of US and European lenders.
Kenya Power’s chief finance manager Lawrence Yego said that the company will also be looking to raise US$ 172m (Sh15bn) from its own operations to supplement the loans.
Mr. Yego also said that, the project plan which costs US$600m (Sh52bn) of the capital expenditure will see them spend US$276m (Sh24bn) on new sub-stations and power lines, US$ 150m (Sh13bn) on upgrading the existing grid, US$ 46m (Sh4bn) on the metering system and US$ 45m (Sh3bn) on IT. The remainder will go towards other running costs for the infrastructure
The US$ 126m (Sh11bn) loan from the Chinese bank will go towards construction of three new substations, including one along Uhuru Highway that will serve the Nairobi central business district and Upperhill.
Kenya Power owns and operates most of the electricity transmission and distribution system in Kenya and sells electricity to over 2.6 million customers as at April 2014.
The Company’s key mandate is to plan for sufficient electricity generation and transmission capacity to meet demand; building and maintaining the power distribution and transmission network and retailing of electricity to its customers.
The Government has a controlling stake at 50.1% of shareholding with private investors at 49.9%.
The power utility has been planning the accelerated expenditure plan in order to take up the additional power set to be generated through the government’s 5000 megawatt plan.
