China’s Exim bank backs underground power supply project in Nairobi

Out-Law News | 19 Sep 2016 | 3:04 pm | 1 min. read

Kenya Power has started work on a major project to boost the electricity supply network in and around Nairobi, backed by financing from the Export-Import (Exim) Bank of China.

Kenya Power chief executive officer and managing director Ben Chumo said in an interview with ESI Africa that the underground cabling initiative had begun around the Kenyan capital at a cost of $128 million, supported by a concessional loan from the Exim bank.

“The project entails installation of underground cables around the city to eliminate interruptions that often result from interference with the overhead cables,” Chumo said. “This is envisaged to improve supply quality to our customers around Nairobi.”

“The underground cabling technology is more aesthetic compared to overhead lines and less expensive in terms of land acquisition challenges and rights of way requirements,” Chumo said.

Chumo said the project followed a detailed grid expansion plan that focused on “putting in place infrastructure that will support electricity supply at the least cost to the public”. He said the plan was based on capital investment in network expansion – in extending power lines, building new electricity substations and refurbishing existing facilities.

According to Kenya Power, which posted a video on YouTube on 13 September of Chumo and utility engineers laying some of the cable channels, an estimated 31 kilometres of 66kV transmission lines underground will be connected to a new substation in central Nairobi.

A survey published in 2014 by the Sino Africa Centre of Excellence Foundation said Chinese companies had created nearly 2,200 direct jobs to date, which was equivalent to 5.3% of the total jobs created through foreign direct investment. Most of those jobs were in automotive original equipment manufacturing, metals, and especially communications, the survey said.

Last year, China and Kenya agreed to extend their ‘industrialisation partnership’ with a new focus on technology transfer and more Chinese involvement in infrastructure development.

The announcement came after the China Communications Construction Company Ltd signed a deal with Kenya to build the first three berths of Kenya’s Lamu Port to handle general, bulk and container cargo under the Lamu Port-South Sudan-Ethiopia Transport Corridor Project.

Earlier this year, Kenya signed a memorandum of understanding for a €60 million loan agreement with the French Development Agency to finance the first phase of construction of a wind farm that will have an eventual electricity generating capacity of 400 megawatts (MW).