KPLC

completed

This project involves an investment of up to $50 million to support the Kenya Power and Lighting Company’s (“KPLC” or ‘the Company”) expansion program for the electricity distribution network throughout Kenya (the “Project”). KPLC is under the jurisdiction of the Ministry of Energy and 51% Government-owned, with the remaining owned by the private sector. KPLC own and operate the Kenyan electricity transmission, distribution and supply network throughout the country, whereas the Kenya Electricity Generating Company (“KenGen”) is responsible for generating capacity. The current generating capacity in Kenya is 1,200 MW and the intention is to increase this to 2,000 MW by 2016. Until February 2009, KPLC was responsible for constructing all new transmission lines. However, as of this date, the Kenyan Electricity Transmission Company (“Ketraco”) was formed to design, construct, operate and maintain new high voltage transmission lines. Thus KPLC is no longer responsible for these functions, though it has retained ownership and responsibility for the operation of transmission lines existing prior to the establishment of Ketraco. Over the last few years, KPLC has invested over $200 million annually towards improving the quality of supply, network expansion, increasing the customer base and reducing systemic losses. To sustain and improve the gains achieved so far, the Company anticipates additional capital expenditure in the order of $230 million over the next 2 years. This will be funded with loans from the World Bank and other multilateral organizations, the IFC, the Government of Kenya, commercial banks and internal cash generation. The IFC loan is expected to be used primarily for investment in distribution infrastructure. KPLC’s distribution network consists of substations and primarily 66, 33 and 11 kV transmission lines that span in excess of 43,000 kilometers. In addition to the transmission lines, the Company is also responsible for the establishment and maintenance of all off-grid power generators. These are all located in rural areas and currently number 38 in total and individually have an installed capacity of between 64 and 673 kW. The total number of connections provided by KPLC increased from 505,951 to 1,753,348 in 2011. The intention is to continue increasing the customer base by 250,000 annually and the target for 2012 is 2 million customers.