Plans are in place to build an 80-MW electric power plant at a site along the Athi river about 25 km southeast of Nairobi.
Behind the €80 million project is Gulf Power, a major Kenyan petrol station operator and fuel importer, which plans to complete the scheme by July 2013.
Three quarters of the required funding will come in the form of loans from agencies affiliated to the World Bank and OPEC (Organization of the Petroleum Exporting Countries) and the Standard Bank Group of South Africa. Gulf Power will raise the remaining funds in equity with an as-yet unspecified partner.
In 2011, Gulf Power signed a 20-year power purchase agreement with the nation's sole electricity supplier Kenya Power Ltd (KPLL). It hopes to sell 200-gram units of liquefied petroleum gas, making it affordable to low-income earners, many of whom rely on cheaper fuels such as charcoal and kerosene.
In addition to Kenya, Gulf Power operates in Rwanda and Uganda, and has plans to launch operations in Tanzania, Zambia and the Democratic Republic of Congo.
Kenya has no oil or gas reserves of its own in commercial production and its electricity use grows at around 14 per cent a year. The country’s Energy Regulatory Commission estimates that demand will increase from about 1,500 MW this year to almost 17,000 MW by 2031.