The World Bank has today approved Ksh.18 billion to support the energy sector in Kenya. The loan guarantee will be used to mobilize private sector financing to strengthen the financial position of Kenya Electricity Generation Company Limited (KenGen).
According to the the project will supports KenGen in raising up to $300 million in long-term commercial financing to be used to refinance an expensive portion of KenGen’s existing commercial loans, enhancing KenGen’s credit quality and promoting sustainable development of renewable energy in Kenya.
It will also 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, WorldBank says these gains are expected to lower the cost of electricity – critical to power Kenya’s manufacturing and growth aspirations.
“Affordable and accessible electricity is essential to ensuring that Kenyan businesses remain competitive in the international market, allows women and youth to run their businesses safely late into the night within informal settlements and strengthens citizen contribution into growing Kenya’s economy,” said Diarietou Gaye, World Bank Country Director for Kenya. “This is what Kenya needs if it is to achieve a middle-income economy status by 2030.”
KenGen today manages 70% of Kenya’s generation capacity of 1,631 megawatts making it one of the largest in East Africa.
The KenGen Guarantee Project is an addition to the application of the World Bank Group’s Maximizing Finance for Development approach within Kenya’s energy sector in the past 20 years.