The loan goes to Kenya Power, the sole transmission and distribution utility in east Africa’s largest economy, where blackouts are common due to generation shortfalls and an ageing grid.
Chief Executive Officer Joseph Njoroge said the first tranche of $50 million, which was received immediately, would be invested in and around Nairobi because “there is compelling and urgent need for electricity network improvement”.
He said while signing the deal: “We estimate that implementation of projects to be funded under this financing arrangement will be completed by 2014, thereby bringing the much needed relief to customers such as reduction of outages,” Reuters reported.
Jean Philippe Prosper, IFC’s East and Southern Africa Director, said Kenya would receive $300-400 million for various projects in the current fiscal year (2012/2013).
Like other African states, the country is required to invest huge sums of money every year to meet growing demand for power, amid robust economic activities.
Kenya Power connected its 2 millionth customer in June this year, under its aim of connecting 200,000 new customers to the grid every year, Njoroge said.