Kenya Green and Resilient Expansion of Energy Program

active

Prospective

Given the need for a long-term, sustained engagement to achieve a financially and operationally sustainable power sector and achieve the vision of universal access to electricity, a 4-phase MPA is proposed with the objectives of increasing access to electricity in Kenya in a financially and environmentally sustainable manner. It is proposed that the first phase would be a PforR focusing on helping KPLC strengthen its financial and operational foundation and allow the continuation of last mile electrification program towards universal access.The second phase of the MPA is expected to provide the critical investment in grid stability equipment (STATCOM and/or battery storage) to increase system resilience, which will allow for increasing imports of cleaner and cheaper energy from Ethiopia from the initial 200MW to up to 400 MW in the medium term. The second phase is also expected to support feasibility studies and preparatory work for competitive auctions for solar with funding support from GCF. Actual auctions are expected to be conducted in the third phase of the MPA. The third and fourth phases of the MPA (to be explored as IPF or PforR) are expected to support transmission and distribution network strengthening and expansion, grid densification, last mile electrification, as well as off-grid solutions (including improved cooking) to reach more remote and marginalized areas. The third phase of the MPA is also expected to support de-risking of renewable energy development (solar and also geothermal, if needed) through a Partial Risk Guarantee instrument. Climate financing from GCF (US$48.5 million from the solar facility and US$30 million from the cooling facility) and CIF (tentatively at US$41.5 million) will be leveraged in support of renewable energy development as part of the MPA. The financing instrument and allocations for the subsequent phases will be determined at the time of processing of each phase based on the implementation progress and lessons learned in the precedent phase, availability of country IDA allocations, IDA terms, and country borrowing limits.The IPF component (US$10m) in the first phase will finance technical assistance and capacity building support and pre-feasibility studies, strategies, and policies that do not directly lead to high-risk downstream investments. The component will support: (i) implementation support including project management, fiduciary, safeguards, and monitoring and evaluation support, particularly the independent verification agent (IVA) for the verification of the DLIs under the PforR; (ii) training and capacity building support to KPLC and other sector agencies; (iii) pre-feasibility studies for solar parks, transmission, and battery storage; (iv) strategic environment and social assessments; (v) update of the low carbon and least cost plan for generation; (vi) other strategies, plans, and policies, including for variable renewable energy (solar/wind) integration that do not directly lead to high-risk investment projects; (vii) update of the Kenya National Electrification Strategy; (viii) development and update of the distribution master plan; (ix) feasibility studies for climate resilient distribution network including distribution substations; (x) any other studies that will not directly lead to high-risk downstream investments. This component will be complemented by analytical studies under Bank-executed trust funds as well as support from other development partners.

FY17 - Energy and Extractives

World Bank Group

Project

Solar, Energy Storage, Power Generation (CCGT), Wind, Geothermal, Commercial, Government