Kenya, France agree $168.8m in energy funding

www.reuters.com
Oct 21, 2009

NAIROBI, Oct 21 (Reuters) - France has agreed to give Kenya 12.7 billion shillings ($168.8 million) for its energy sector, the office of Kenya's Prime Minister said on Wednesday. Some 7.2 billion shillings of the new funds will be used to buy two rigs and to build capacity in the recently formed Geothermal Development Company (GDC), which is mandated with development of the country's considerable geothermal reserves. The balance will go towards the existing Ol Karia Geothermal Power project, which is run by the nation's main electricity generator, KenGen (KEGN.NR). "They have also agreed to increase funding for the Ol Karia Geothermal Power project by 5.5 billion and also pledged to help Kenya shift from reliance on fossil fuels to green energy," an official statement said.

In March, KenGen said it had acquired a $300 million from the French Agency for Development (AFD) for the third phase of the Ol Karia project. [ID:nLC948712] Kenya estimates it has the potential to generate 3,000 MW of geothermal power from the Rift Valley region. Officials say geothermal, which accounts for 200 MW of the East African nation's electricity output, is expensive to tap, but cheaper for the economy in the long run. The agreement on the new funding which was agreed between AFD and Kenyan government officials led by Prime Minister Raila Odinga is subject to approval of the AFD's board, a statement from Odinga's office said. It added that France had shown its willingness to support Kenya's efforts to diversify its sources of power through development of solar and wind generation plants.