Africa News Bulletin

Kenya & Ethiopia: Kenya and Ethiopia to expedite $1.3bn power deal

Kenya and Ethiopia have agreed speed up the delayed power purchase deal worth $1.3 billion that will see the former import 400 megawatts of power annually.

Last week, an Ethiopian delegation led by Finance Minister Eyob Tekalign was in Nairobi for talks with Kenya’s Energy Cabinet Secretary Monica Juma.

The two delegations deliberated on previously signed Power Trade Agreements, finalisation, operation guidelines and procedures, wheeling as well as interconnection agreements.

They agreed that the interconnection project is a mega-project whose benefits spread beyond Ethiopia and Kenya.

Tekalign said it was necessary to ensure that Ethiopia and Kenya fulfil the dreams and aspirations of both countries to see the entire region connected to electricity.

“The value of the interconnection of our power systems is key to powering our aspiration for fast growth,” said Juma.

The system is an investment of $1.3 billion with a modern 500KV line, an important vehicle for East Africa interconnection and nucleus for regional integration and prosperity.

The Ethiopia-Kenya electricity transmission line is expected to integrate power systems of five countries including Ethiopia, Kenya, Tanzania, Uganda and Rwanda under the Eastern African Power Pool (EAPP) Master Plan.

The plan seeks to take advantage of excess capacity within the network and facilitate the trade of electricity between member countries.

The power line has been on cards since 2012, with Ethiopia blaming Kenya for delays even after several lenders committed funds.

The World Bank approved $684 million (Sh77.2 billion) for the over 1,000-kilometer power line in 2012, allocating Kenya $441 million( Sh49.8 billion) and Ethiopia ($243 million or Sh27.4 billion ) in the first phase.

The African Development Bank (AfDB) followed suit, approving Sh29.2 billion financing deal for the project.

The lender allocated $232 million to Ethiopia and $116 million to Kenya for the transmission line linking East Africa’s economic powerhouse to the Gilgel Gibe III dam in southern Ethiopia.

Under a power purchase agreement, Kenya Electricity Transmission Company (Ketraco) was to interconnect the national power grid to the Ethiopia Electricity Power Company by 2016.

This would have paved way for Kenya to import 400 megawatts of cheaper hydropower.

According to the plan, transmission costs between Moyale and Nairobi will provide an additional Sh2 a kilowatt-hour.

At a maximum of Sh9 a kilowatt-hour, the cost of hydroelectricity will still be lower than the current rate.

The talks on the PPA are being revived at the time Kenya is implementing changes in its energy sector after numerous cases of alleged mismanagement spanning several years.

Original story on The Star

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top