African Development Bank (AfDB) has loaned Kenya Power KES15bn to increase the number of Kenyans connected to the national grid. This treaty will enable the national power distributor to connect 314, 0000 households before end of June 2016.  This was announced during a power purchase agreement ceremony between Kenya Power and two local companies to provide 70MW of power.

The World Bank and Government of Kenya has already loaned the firm KES28.5bn to fund new electricity connections. The funds from AfDB will be released any time now and will be essential in creating demand for new power generation coming on board.  Such developments and many more, come at a time when demand for electricity among consumers stands at 2,766,441 in June 2014 from 735,144 with the cost of electricity connection reducing to KES15, 000.

As at 2014, electricity provided 9% of overall energy requirements in Kenya, while petroleum and renewable energy provided 22% and 69%, respectively. Demand for electricity has shown an upward trend since 2004 due to accelerated economic growth. Peak demand also increased from 899MW in the year 2004/05 to 1,470MW in FY2013/14 reaching 1,512MW by December, 2014. 

This peak demand is expected to grow to 3,400MW by 2016 and 5,359 by 2018. Thus, the government of Kenya is targeting 5,000MW of power by 2017 to bridge the gap in bringing power to the people in terms of accessibility and reliability.  This will later promise reduction in generation cost from US? 11.30 to 7.41, whereas for commercial /industrial customers will drop from US? 14.14 to 9 while domestic customers from US? 19.78 to 10.45.This capacity will be generated from various sources of energy such as natural gas, wind, solar and geothermal through Independent Power Purchase under Public-Private Partnerships.

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