KenGen Plans New Power Plant

KenGen, Kenya’s electricity generation company is looking to raise funds to construct a new gas-fired power plant. The company plans to raise the funds from private investors.

The $686 million gas-fired power plant will be run on imported LNG, according to KenGen MD Eddy Njoroge.

The plant is expected to help the country meet its growing demand for electricity and help prevent frequent blackouts caused by capacity shortfalls and an aging grid. Construction is expected to take up to five years and have a capacity of about 485 MW.

"We are now exploring ways to finance the project," Njoroge told Reuters. "We have not raised any funds yet, but we are working closely with the PPP unit (private public partnership) on how we can structure the project to be implemented as a PPP project." Because the government lacks funds, PPPs have become a popular method for financing infrastructure projects in recent years. Under similar agreements, private entities and government both contribute capital for projects.

The power plant is to be based at the port city of Mombasa and will be fuelled by LNG processed at a facility located nearby and will reduce over-reliance on the more costly heavy fuel oil. Kenya last year said it planned to float a tender for a LNG terminal at Mombasa. If that does not move forward there is also the possibility of securing LNG feedstock from neighboring Mozambique or Tanzania, if the plans for their LNG facilities move forward at a complementary pace.