JBIC signs loan to support power supply in Kenya

8 March 2004 – The Japan Bank for International Cooperation (JBIC) has signed an ODA loan agreement with Kenya Electricity Generating Company Limited in Nairobi. The loan agreement, amounting to 10 554 bn yen ($95m), is the second phase of the March 1997 loan for the Sondu/Miriu Hydropower Project II.

The project will help construct a hydropower plant with a capacity of 60 MW in the Nyando and Rachuonyo districts in the western part of Kenya. Proceeds of the loan will be used to finance civil works for the penstock, powerhouse and outlet channel; procurement of generators; construction of transmission lines and substations; and consulting services.

The plant will help alleviate Kenya’s power shortage. Due to aging power plants the country is facing a tight power supply and currently has to purchase electricity from neighbouring Uganda. Kenya’s national power development plan has projected that power demand will grow by an average of five percent annually during the next ten years. It is therefore essential that Kenya develops hydropower as a domestic source of energy.

The ODA loan forms part of JBIC’s Medium-Term Strategy for Overseas Economic Cooperation Operations where priority is given to “developing infrastructure for economic growth”. It is expected that the project will help Kenya move towards achieving a stable power supply and thereby contribute to its sustained development.