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Private power producers to get liquidity support for projects

Independent Power Producers intending to sell power to the government through state-owned power utilities will access cash flow equivalent to a year of revenue.

This follows the signing of a memorandum of understanding between the National Treasury and the the African Trade Insurance Agency (ATIDI) for the establishment of the Regional Liquidity Support Facility (RLSF).

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The facility which targets renewable energy IPPs with projects of up to 100 megawatts targets to enhance renewable power generation in the country by ensuring the firms mitigate delayed payments and making the projects viable.

“The provision of RLSF policies will hopefully enable more projects to advance whilst reducing the need for government-backed credit enhancement tools,” Prof Njuguna Ndung’u, Cabinet Secretary for National Treasury and Economic Planning.

According to ADITI, they will onboard private transmission companies for a maximum of up to 15 years with the expectation that advanced hydro, geothermal, solar, and wind projects may benefit from this instrument in the near future.

“Our support for new projects in Kenya via RSLF will build on our historical involvement in the country’s energy sector, having supported projects such as Lake Turkana and Kipeto wind projects in the past,” added Manuel Moses, ATIDI Chief Executive Officer.

The projects will not only focus on leveraging the country’s abundant natural resources to generate clean and sustainable energy, but will also reinforce its power generation and transmission capacity.

“The planned collaboration between ATIDI and the Government of Kenya should make a positive contribution towards the attainment of the country’s long term development agenda – the Vision 2030 – which aims to ensure Kenya becomes a ‘newly-industrializing, middle-income economy, providing a high quality of life to all its citizens in a clean and secure environment’ – increased energy access and greater reliability, courtesy of instruments such as RLSF and similar alternatives, is a key enabler of this vision,” added Energy and Petroleum Cabinet Secretary Davis Chirchir.

Currently, Kenya generates at least 80pc of its energy needs from renewable sources lead by geothermal and hydro.

State utlities involved in the MoU include Geothermal Development Company (GDC), Kenya Electricity Transmission Company Limited (KETRACO) and Kenya Power and Lighting Company(KPLC).

Sally Namuye
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