Japan Bank for International Cooperation (JBIC) has signed an ODA loan agreement totalling up to ¥5.62bn for the Sondu-Miriu Hydropower Project Sang’oro Power Plant with Kenya Electricity Generating (KenGen).

The project consists of construction of a 21.2MW hydropower plant (two 10.6MW-generating units) at Kisumi, Nyanza Province in western Kenya. The objective of the project is to increase power supply, which is crucial for the country’s economic development.

The proceeds of the loan will be used for civil works, installation of generators and transformers, construction of transmission lines and consulting services.

In Kenya, power demand is projected to grow at an average annual rate of 5% over the coming decade.

However, it is difficult to increase the power supply because Kenya’s aging power plants have either been closed or are plagued with falling capacity.

In addition, the import of electricity from neighbouring Uganda is limited due to Uganda’s own power shortage. Therefore, given the prospect of facing a tight power supply relative to growing demand, the construction of new power plants is an urgent issue on the country’s development agenda. Since Kenya does not have fuel resources such as coal and oil, hydropower development acquires significant importance. This project is designated the highest priority in the country’s power development plan.

The project will recycle the water discharged from the Sondu/Miriu Hydropower Plant (60MW) under construction funded by an ODA loan (and scheduled to be completed in November 2007) before the water returns to the Sondu River.

There are high expectations for early implementation of this project as an economical project that effectively utilises the country’s precious water resources.