Sh3 Billion for the Heavy Fuel Oil Power Plant

Last Updated 14 years ago by Kenya Engineer

The World bank through its private lending arm, International Finance Corporation (IFC) will be injecting Sh3bn into the country to set up a new Medium Speed Diesel (MSD) power plant-Thika Power Limited (TPL). The independent power plant will be a heavy fuel oils (HFO) plant and will generate 87 mega watts of power.

The project is a result of the Kenyan government’s tender of three power plants in 2009 to encourage private sector participation in electricity supply. It is a subsidiary of Melec PowerGen Inc., and an affiliate of the Matelec Group of Companies from Lebanon.

“With the massive growth in energy demand in Africa, Independent Power Projects can add reliable and sustainable capacity to the power network,” said Samer Nasr, Managing Director of Melec PowerGen Inc.

The proposed site for the Project is adjacent to the Nairobi – Thika highway, approximately 30 km north of Nairobi city centre and 5 km south-west of Thika Town. The TPL Project will occupy approximately 4 hectares of the 8 hectres of land acquired by Kenya Power from Agro Tropical for the purpose of constructing a substation as part of the wider Kilimambogo – Thika – Githambo – Kiganjo (Nyeri) and Thika – Kiganjo (Gatundu) 132 kV Transmission Lines and Associated Substations Project.

TPL will sell all output to the national distributor, Kenya Power increasing the supply of reliable electricity in the country as well as help diversify Kenya’s electricity away from hydropower.HFO plants are considered a quicker option to address energy deficit, given the relatively long period of developing other sources like geothermal and coal energy.

It is estimated that only 25 per cent of the country’s population has access to electricity while the rural grid access is about five per cent. According to the World Bank, power shortages currently cost the Kenyan economy 2 percent of GDP growth.

Also funding the project is the African Development Bank (AfDB) and Absa Capital will contribute €28 million to the project. IFC is also investing in another winning bidder, Gulf Power Ltd.