Agence Française de Développement

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PRESS RELEASE

21 May 2007.

AFD activities in the energy sector in Kenya

The AFD is financing projects in Eastern Africa at a cost of 332,7 M€ ,with 277,6 M€ being committed in Kenya alone. Since 1997, the French Government has committed 105 M€ in the energy sector in Kenya. AFD is present and highly active in the development of all energy sectors in Kenya. Thus, France, through the French Development Agency is a lead donor in the energy sector in Kenya and is chairing in this respect the energy donor coordination group.

This year, the AFD is spending 30 million euros in rural electrification. The French Rural Electrification Project Phase II will see the expansion of new lines reaching 2000 kms, all spread out through six provinces of Kenya: Western, Nyanza, Rift Valley, Central, Eastern and Coast provinces. Upon the completion of this project, 38 000 markets, administrative buildings, shops and factories, 114 health centres, 200 000 students, 2 000 hospital beds and 47 000 households will have benefited from this investment.

In partnership with KPLC, the agency is also financing the rehabilitation of sub-stations in Nairobi and in the Coast Province at a cost of 25 M€. It also finances a study on connection policy geared towards facilitating a higher connection rate in rural and urban areas. The Agency finances these projects in partnership with the GoK, KPLC, the World Bank, the European Investment Bank and the NDF, all founders of the Energy Sector Recovery Project.

AFD has also recently signed a 40 M€ direct loan to Ken Gen for the conversion of Kipevu turbines in combined cycle. This will increase Kipevu's capacity by 50% (+30 MW) and will reduce CO2 emissions. It is a direct loan to Ken Gen without Government guarantee. To access this soft loan funding, KenGen has committed itself to finance a 5,5 M€ watershed development project at the Upper Tana catchment area, where its major hydropower plants are located. The aim of the environment program is to restore and protect selected watersheds so as to reduce sediment loads into rivers and reservoirs, augment river water flows and hydroelectricity dams capacity, and promote agricultural development of the water shed with environmentally friendly techniques. It is the first example of payment for environmental services from a key economic player in Kenya.

AFD is currently appraising the funding of a very high voltage line between Nairobi and Mombasa. This infrastructure is of dramatic importance for the Kenyan economy as most of the new power plant will be situated on the coast when important load needs will remain in Nairobi and Western Kenya.