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Deal draws Kenya closer to tapping cheaper electricity

Fred Aminga @faminga

Kenya is poised to tap another cheaper electricity pool with the completion of the Ethiopia – Suswa 500 kilovolt high-voltage direct current transmission line injecting 2,000 megawatts (MW) into the country.

This line, which was scheduled to enter operational phase in 2019, is expected to provide cheaper uninterrupted supply of electricity to the national grid.

The bi-lateral agreement requires that once the Kenya Electricity Transmission Company (Ketraco) is done, Kenya Power buys 400 MW of hydropower from Ethiopia at a fixed tariff of seven US cents (Sh7) per unit for onward sale to homes and businesses.

At Sh7, Ethiopia’s hydropower is cheaper than Kenya’s geothermal (Sh8.5 per unit), although it is higher than local hydro (Sh5), whose supply is inadequate.

This deal cushions Kenya from effects of drought which usually come with high cost of power as the country turns to costly diesel electricity generators to bridge the gap left by drying hydro dams.

The project, co-funded by the African Development Bank, the World Bank, the government of Kenya and the government of Ethiopia cost $1.26 billion (Sh127.4 billion).

The 1,068-kilometre transmission line entails 437km in Ethiopia and 631km in Kenya with sub-stations at Wolayta-Sodo in Ethiopia and the sub-station at Suswa.

Nerve centre

Ethiopia has already completed its bit and Kenya has laid the line up to Laikipia. Ketraco managing director Fernandes Barasa estimates that it is 75 per cent done.

When the remaining stretch from Laikipia to Suswa will be completed, it will make Suswa sub-station the nerve centre of Kenya’s energy value chain.

Another cheaper green energy project, the Lake Turkana Wind Power in Loiyangalani, is already injecting up to 310MW daily to the national grid through the Suswa sub-station.

The project banks on Ethiopia’s huge hydro generation potential which is estimated at 45,000 MW.

This project is expected to create transmission capacity needed in interchange of electric power between Ethiopia and Kenya, in the long run and ease the power into Tanzania through Suswa sub-station to Isinya.

“We expect that once the T-line comes on board we will have regional power trade. We’ll be buying their hydropower and should they require our geothermal an arrangement shall be made to sell to them,” said Barasa.

Further, this move is expected to deepen investment opportunities in electricity infrastructure and also give rise to development of new industries.

Ketraco has already started the process of setting up a 220kv line to the new industrial park to be set up in Naivasha.

Economic zone

Treasury already released Sh700 million for the provision of water to the Special Economic Zone in Mai Mahiu area of Naivasha as works in the multi-billion-shilling project is expected to kick off on the 1,000 acres site by August.

It will also give the country a new source of revenue since Tanzania will be paying for the infrastructure whenever they tap power from the inter-connector.

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