Kenya smallholder tea farmers earn Sh63.6 billion from tea exports
More Kenyans to access electricity as World Bank gives Sh41 billion
By TF News Reporter
Over 630,000 Kenyans will benefit from access to electricity after the World Bank gave Sh41 billion ($457.5 million) to support the energy sector including the Kenya Power and Lighting Company (KPLC.
According toe the bank, the money will support existing consumers to enjoy better quality of electricity services while KPLC that distributes power will be financially stronger.
“We are making this significant and innovative investment in Kenya’s power sector to expand electricity access to low income households and small businesses as part of the nation’s push for shared prosperity” says Diarietou Gaye, World Bank Country Director for Kenya.
“Modern, reliable electricity will improve the quality of life of Kenyans and underpins enhanced competitiveness of the Kenyan economy”
The World Bank Group’s Board of Executive Directors Tuesday approved a total of $457.5 million for the Kenya Electricity Modernization Project.
The amount includes an International Development Association (IDA) credit of $250 million, an IDA guarantee of $200 million and a $7.5 million grant from the Strategic Climate Fund-Scaling up Renewable Energy Program.
The IDA guarantee will enhance KPLC’s credit quality and enable it to raise about $500 million of new commercial debt with lower interest rates and longer tenors to replace existing debt that is placing a heavy burden on the company.
The bank says in a press statement that innovation in the new project is reflected in the complementarity of its various elements including technical and financial support for the Government’s electrification “Last Mile” program, financing for new connections and improved service quality, and credit enhancement for KPLC.
The IDA credit, together with the grant, will be used by the Government, KPLC and the Rural Electrification Authority (REA) to finance infrastructure investments and also to support technical assistance and training activities of KPLC, REA, the Energy Regulatory Commission and the Ministry of Energy and Petroleum.
The IDA Guarantee will allow KPLC to significantly reduce its financing costs, improve liquidity and continue investing in improving the quality and coverage of its services.
“KPLC is the cornerstone of the energy sector in Kenya and its financial strength is critical to the sector’s sustainability and continued growth. A financially strong KPLC is essential to continue attracting much needed private investment to the sector,” say Pankaj Gupta and Lucio Monari, Practice Managers.
“Improved service quality and more reliable electricity service that reduces the duration of outages will allow businesses to operate more consistently and reduce their dependence on costly standby generators.”