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By Editorial team
Japan’s increased aid and investments in Kenya suggests it is re-bounding its focus on the country’s economic critical engines, key among them being the lucrative energy sector.
In March, 2016 for instance Japan International Cooperation Agency (JICA) on behalf of the Japanese people, signed a loan agreement worth 45.690billion Japanese Yen (approx. Sh40billion) for the construction of Olkaria V Geothermal Power plant.
The grant was aimed at enhancing the volume and security of power supply in Kenya by constructing 140 megawatts (MW) of geothermal power plant which will be undertaken by the country’s power producer KenGen to construct steam gathering system, a transmission line and substation in Olkaria.
The loan, according to National Treasury CS Henry Rotich is the largest amount of JICA ODA loan since Japan started Official Development Assistance in 1963, and indicates Japan’s strong commitment to assist developing countries’ sustainable economic development through renewable energy.
Cumulatively Kenya has received financial support amounting to Sh472.7billion from the Japanese government, making it one of its major bilateral partners.
The relationship between the two countries in enhancing the country’s energy supply comes even as the Energy Ministry is closing in on its mission to generate over 5,000MW of power by next year, most of which are to be sourced from renewable energy sources like geothermal and wind power.
Currently Kenya’s electricity generation capacity stands at approximately 2,350 MW, of which 296 MW of this has been financed by Japan through concessional ODA Loans to KenGen, namely, Kipevu I Diesel Power Plant (75 MW), Sondu Miriu Hydropower Plant (60MW), Sang’oro Power Plant (21MW), and Olkaria I Units 4/5 Power Plant (140 MW).
The new geothermal power generation is expected to replace the diesel power plants, the Fuel Cost Charge (FCC) which has since dropped by 60 per cent between July 2014 and February 2015 as well as the cost of electricity which according to Kenya Power calculations has ‘dramatically’ fallen.
Japan is also financing the Olkaria-Lessos-Kisumu Transmission Lines, and providing technical assistance on geothermal to Geothermal Development Company (GDC), JKUAT-Institute of Energy and Environment Technology (IEET), and Rural Electrification Authority (REA), in order to enhance Kenya’s capacity in geothermal development and other renewable energies.