Kenya -Private Sector Power Generation Support Project 

February 28, 2012

United States Position 

The United States supports the discussion on Thika Power Limited, Triumph Power Generating Company 

Limited, Gulf Power Limited --all greenfield thermal PPs --and ORPower 4, the sole integrated 

geothermal expansion IPP. The World Bank Group has provided the Government of Kenya a well

balanced mix of guarantee and financing options, which includes $166 million in IDA guarantees, $90 

million in IFC A, B, and C loans and MIGA Breach of Contract guarantees. The United States supports

this proposal and appreciates the fact that it has been presented as a harmonized power support project, 

which complements Kenya’s long-term development plan, Vision 2030. The United States is glad to see 

that Kenya will contract over 600 MW of new generation capacity over the next 12-18 months through 

these four IPPs as well as other IPPs in the pipeline in order to meet the country's acute power supply 

shortage. The United States encourages the World Bank Group to continue to collaborate with Kenya on 

future IPPs and on managing a power sector development strategy, which can better withstand the 

negative effects of external shocks. 

Kenya's ambitious goal of achieving 40 percent electrification by 2030 amid a rapidly growing and 

urbanizing population will require coordination with both the private sector and multilateral development 

banks. The successful coordination between Kenya, the World Bank Group, OPIC, AfDB and private 

sector in this and future power generation projects will be critical toward achieving this target and 

ultimately improving access to reliable electricity in Kenya. The United States notes Kenya's 

development of a diversified portfolio of complementary electricity assets that balances sources of power 

and types of technology while maintaining appropriate measures to mitigate potentially adverse 

environmental impacts. As several of the projects are in close proximity to either national parks or 

sensitive habitats, the United States encourages the Bank Group to continue to liaise with the Kenya 

Wildlife Services (KWS), the National Environment Management Authority, and Hell's Gate National 

Park authorities to monitor and address environmental impacts, while providing regular and publically 

available reporting updates to the Board. The United States also urges the Bank and the Kenyan 

authorities to collaborate to develop a sectoral assessment for the power sector including the cumulative 

impacts of future power generation sites on potentially environmentally sensitive areas, both from 

renewable and fossil fuel sources. 

The United States notes Kenya’s commitment to a multi-pronged power sector financing strategy that, in 

addition to the Multilateral Development Banks, looks more closely to its local capital markets and 

private foreign investors to help meet the significant financing gaps in its power sector. The United 

States hopes that this strategy leads to a more productive power generation sector where competition and 

quality service delivery are integral. The United States understands that Kenya has made progress 

establishing a policy framework to improve the commercial viability of electricity companies and 

opening the door for competition in the electricity market. The United States asks the Bank Group to 

remain engaged with Kenya on developing a robust power sector policy framework with a tariff structure 

that works both for the private sector as well as the Kenyan public, especially household consumers. The 

United States hopes that, with the help of the World Bank Group, Kenya's work on its power sector 

could be a model for countries in Africa and beyond.