Two new companies, the Geothermal Development Company and the Electricity Transmission Company of Kenya will be established this financial year.
Energy Minister Kiraitu Murungi says the move is aimed at increasing electricity generation and transmission of power in the country as part of measures aimed at realizing the millennium development goals, of halving extreme poverty by the year 2015.
The Minister said in order to double the number of people connected to the electricity grid in the country, from the current one million to two million in four years, "the government is investing over 750 million shillings in the venture," said Kiraitu.
He said many households have suffered high electricity tariffs and poor transmission; a matter he noted is being dealt with through the establishment of the new power transmission company. He clarified that Kenya Power and Lighting Company will continue handling the old and current transmission lines.
The Minister said the government will own 70 per cent stake in the Geothermal Development Company while the remaining 30 percent stays with the electricity generating company KenGen.
While addressing the East African Power Industry Convention in Nairobi, the minister said the skyrocketing fuel prices, coupled with high electricity tariffs and erratic transmission of the commodity is an impediment to the realization of the millennium development goals.
However Murungi says the establishment of the two companies would be funded by the taxpayers.
"Taxpayers will have to dig deeper into their pockets to enable the government achieve its goal of intensifying power generation", he said.
Kiraitu said that the move will enable the government meet the rapidly growing demand for electricity since the declaration of the Millennium Development Goals in 2000 from 734MW in 1999 to a peak of 1053MW in 2008.
Power demand is projected to grow by 7 per cent annually over the next 10 years, reaching 1847MW by 2015, the time horizon for the realization of the Millennium Development Goals and about 3000MW by 2020.
The minister said that a US $200 Million multi donor funded power distribution upgrade project is currently under implementation which is aimed at addressing the deteriorating quality power supply in Kenya.
"This project, which is also co-financed by KPLC, has been on going for the last 18 months and is expected that on completion of this project the quality of power supply will improve" he said.
He said in order to cope with the accelerated distribution network expansion, the government has decided to set up a national transmission company to be known as Electricity Transmission Company of Kenya and has allocated Ksh 750 Million in this fiscal year's budget for that purpose.
