Aid for energy sector

Low-income households will have increased access to electricity after the government got a 5.4b loan and a 550M grant from the French government.

The French government through the French Development Agency (AFD) advanced the funds after the signing of crucial financing agreements with the Kenyan government to facilitate scaling-up of energy projects.

The loan will finance projects that will see rural electrification program bear tangible fruits with potential customers getting loans dubbed StimaLoans to enable them pay for their domestic connections. Currently one has to pay Sh. 35,000 before electricity can be pulled from the poles into the house which has proved to be beyond the reach of many.  StimaLoan will seek to assist 500,000 new customers get connected to the grid in the next five years.

There shall also be increased distribution of energy-saving light bulbs with the government seeking to reach roughly 1 million new users.

In addition, more transformers will be installed on the existing national network so as to maximize the number of customers can be connected countrywide.

“Energy is a key element of economic development. Kenya seeks to grow its national wealth from 5% to 10% and thus access to energy for all must be urgently facilitated,” said the Finance Minister Njeru Githae.

Kenya lags behind in matters energy with only about 25% to 30% of households in Kenya having access to electricity with the connection rate dropping to around 15% in rural areas. Thus these French-funded projects will go a long way in improving the situation.

The terms of the loan are that it will attract a 1.1% interest with the payment period being 20 years and the grace period being one year.

The grant which is sourced from the Social Fund for Development will be disbursed through non-governmental bodies’ and it will seek to help improve lives of those in living in informal settlements and in rural areas.

The agreements were signed at Treasury building in Nairobi by the Minister for Finance, Njeru Githae, the French Ambassador, Etienne de Poncins and the acting Director of AFD in East Africa, Hugo Pierrel.

The project which benefits from a 5 million Euro interest rate waiver from the Energy Facility of the European Union is in line with the Paris-Nairobi initiative promoted by the French and Kenyan governments to support access to green energy for all in Sub-Saharan Africa.


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