China Exim Bank lends Kenya Sh7.5bn for energy

Kenya has received a Sh7.5 billion loan from the Export-Import Bank of China to drill geothermal wells for production of 140 megawatts of energy.

In what appears to a shot-in-the-arm for the country to pull itself out of the unpredictable and costly hydropower generation, the money will be used to explore 26 steam production wells at the Olkaria IV geothermal field in Naivasha.

Kenya has geothermal power potential estimated at 7,000 MW and hopes to tap 5,000 MW of it by 2030.

“In consideration of the present energy situation, high fuel prices and over dependence on hydropower production, the Government of Kenya now recognises the need to diversify sourcing of power generation through environmentally friendly sources,” said Finance minister Uhuru Kenyatta on Tuesday during the signing ceremony.

China is one of Kenya’s main bilateral partners with cumulative development assistance of Sh29.45 billion.

Last month, Kenya received a Sh23.4 billion loan from Japan for another 140 MW at its Olkaria I plant.

Earlier in the day, the bank’s vice president Zhu Hongjie held talks with President Kibaki, where it was disclosed that under the Forum for China Africa Co-operation platform, China had enabled Kenya boost the pace of implementing vital development projects.

Port of Lamu

Mr Kibaki said Kenya is determined to develop the Port of Lamu and establish a standard-gauge railway to serve the Northern parts of the country, the Southern Sudan and Ethiopia.

Among ongoing projects financed by China include the Nairobi Eastern and Northern By-Passes at a cost of Sh9.5 billion.

The Kenyatta University to Thika Road that is part of Nairobi-Thika Highway Improvement Project is being implemented at a cost of Sh10.6 billion.

It involves the construction of extra lanes from Kenyatta University to Thika Town intended to improve traffic flow along the route.