World Bank signs risk guarantee for the energy IPPs in Kenya

Last Updated 14 years ago by Kenya Engineer

Independent Power producers (IPPs) in the country have a reason to smile following the World Banks approval of a Partial Risk Guarantee (PRG) of Sh3.74 billion. The move is designed to encourage private investors to take advantage of the growing opportunities in the energy sector.

The government is expected to provide letters of support to the IPPs while the WB will guarantee letters of credit issued by banks to the IPPs.In addition, termination and political risks faced by investors will be covered by the WB Multilateral Insurance Guarantee Agency.

Among those benefiting from the PRG is the Sh12 billion Thika Power plant which is due for completion by the end of this year. Others are Triumph Generating Company (82MW), Gulf Power (80.3MW) and Or Power (52MW) who will be expanding its geothermal project at Ol Karia.

Upon completion, the four IPPs will add 285MW of electricity to the national grid. This is about a third of the current installed capacity. The PRGs will enable Kenya Power to mobilize long-term commercial financing to purchase electricity from private investors and boost power supply.