Ethiopia And Kenya Agree on Electricity Purchase Deal


Nairobi, December 16, 2011 [ras] –  Kenyan and Ethiopian officials have agreed on an electric power purchase agreement, which would enable Nairobi to buy 400 MW of power from 2016 once the two countries merge their national grids, officials said late on Wednesday.

Kenyan Energy Permanent Secretary Patrick Nyoike, said negotiations with an Ethiopian delegation in Nairobi, resulted in an agreement on the power purchase agreement at the cost of 0.0084 U.S. cents per kwh.

“We have agreed on the purchase of 400 MW at the price of 75 cents(shilling).
“The negotiations lasted until late.”The Ethiopian delegation had to leave urgently afterwards,” Nyoike said.

The two sides had earlier announced plans to hold public signing ceremony of the power-purchase agreement to celebrate the deal, which has been on the cards since Ethiopia started the construction of its GibeI, II and III series of hydropower plants.

Ethiopia has been facing opposition from Egypt, which insists the use of the Nile waters were likely to affect the water volumes flowing into Egypt.

Environmentalists have also blamed the ambitious hydropower project for its possible impacts on millions of pastoralists dependent on the Lake Turkana on the Kenyan side and on Lake Tana, on the Ethiopian side.

“There is political will and full commitment by the two countries in the talks which are now on the final stages of conclusion,” the two sides said in a statement on Tuesday.

Nyoike, who spoke to Xinhua on Wednesday, said an agreement on the power purchase agreement was reached at a final cost of 75 cents.

The Kenya Electricity Generating Company (KENGEN) Managing Director Eddy Njoroge welcomed the deal.

“They (Kenya and Ethiopia) have not concluded the transmission line, which is expected to be ready by 2016.

“All the funding agencies are keen on this project because it is one way of mitigating the electricity shortages due to weather,” Njoroge said.

“The importation of electricity is an effort to compliment our own plans.
“We expect demand for electricity to hit 17,000 MW by 2030.

“There is hope our installed capacity would have increased, but it takes a longer time to develop power plants,” Njoroge said, “We feel it is right to look at other sources.”

KENGEN, which generates 763MW of electricity, which it sells to the state-distribution agency, the Kenya Power and Lighting Company (KPLC), is currently battling against a threat to auction its assets over unpaid water usage fees.

Kenya’s water authority, has threatened to auction the firm’s assets unless it pays up for the water it uses to generate electricity in the country.

Njoroge said his company was currently in talks with the government to either pay up the regulator or be allowed to pass the costs of electricity consumers.

He said the inter-connector was being funded by the several funding agencies.

Njoroge said although the power inter-connector was still far off, the deal was crucial at this time.


source: Xinhua