The World Bank has approved a $180m International Development Association (IDA) Guarantee towards the Kenya energy sector. The loan will go to Kenya Electricity Generating Company Limited (KenGen), the leading electric power generation company in Kenya. In order to strengthen the financial position of the company.
The project will build on Kenya’s gains that have diversified the energy mix and significantly improved electrification bringing much needed energy to millions of households and businesses. Ultimately, these gains lower the cost of electricity – critical to power Kenya’s manufacturing and growth aspirations. Affordable, accessible electricity supports Kenyan business locally and internationally, and strengthens citizen contribution into growing Kenya’s economy. The IDA will thus help contribute to ensuring that Kenya becomes a middle-income economy status by 2030.
This loan will aid in securing long-term commercial financing of up to $300-million to refinance part of KenGen’s existing commercial loans, enhance its credit quality and promote further development of renewable energy in the Kenya energy sector, the World Bank said.
Mariano Salto, World Bank Energy Economist and Task Team Leader says that, ““This IDA Guarantee will solidify KenGen’s financial position as the company pursues its aspirations towards geothermal development, building energy security for all Kenyans, and becoming a sustainable energy hallmark in Africa.”
About Kenya Electricity Generating Company Ltd
KEGC Ltd currently produces about 75 percent of electricity capacity of 1,631 megawatts installed in Kenya, making it the country’s leading power generation company. The company utilizes various sources to generate electricity ranging from hydro, geothermal, thermal and wind. Demand for electricity is growing in the country, with an annual 8% growth, according to the government’s transmission and generation plan. As such, the country is increasing its electricity generation, which relies heavily on renewables such as geothermal and hydropower.
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