World Bank, USAID ramp up energy sector development in Kenya

In the first half of 2014, the World Bank and the U.S. Agency for International Development — Kenya’s top two development partners — have launched multiple competitive bidding processes meant to scale up energy infrastructure improvements in Kenya. Kenya has been plagued by the high cost of energy, leaving the population with limited power supply and Kenyan businesses with bloated production costs. The Kenyan government has laid out plans to invest in energy infrastructure to address these problems. Under the current medium-term plan, Kenya will focus efforts on upgrading its energy infrastructure network, stepping up energy generation from renewable sources and increasing energy supply generation by 5,538 MW by 2017. In its most recent medium-term expenditure framework, Kenya reported a 65.7 percent increase in its approved recurrent spending budget for the energy, infrastructure, and information and communication technology sectors. The allocation jumped from 242.93 billion Kenyan shillings ($2.77 billion) in fiscal year 2013 to 402.37 billion Kenyan shillings for fiscal 2014; a solid indication of the country’s commitment to building its capacity on this front. Kenya’s development partners have likewise aligned their efforts with government priorities. In June 2013, USAID launched Power Africa — a $7 billion initiative that aims to increase access to electricity in sub-Saharan Africa. In Kenya, support is delivered through loans, grants and technical assistance, and by promoting investment in the energy sector. The program aims to leverage more than $1 billion in private sector investment to support geothermal and wind projects, while focusing technical assistance efforts on developing inexpensive, efficient and sustainable means of energy generation. Since launching its multibillion-dollar project, USAID has rolled out tender and grant opportunities within Kenya’s energy sector. Early this year, USAID concluded a competitive bidding process to support the implementation of Power Africa by providing technical assistance, capacity building and project transaction assistance to relevant stakeholders. In April, a call for applications was announced by the donor agency in seeking to collaborate with the private sector. The $7.5 million grant aims to build partnerships that will help implement Power Africa programs and assist USAID’s private sector counterparts in pursuing their own business and development objectives. Soon after, the donor agency launched another call for applications with the goal of increasing access to sustainable energy in Power Africa focus countries. The first five-year phase of USAID’s energy program for Africa will run until 2018 and is expected to yield several more financing opportunities in the process. Meanwhile, current World Bank commitments to Kenya amount to $4.7 billion, most of which are allocated for infrastructure improvements in the transport, telecommunications, energy and water sectors. By investing in these areas, the bank hopes to ease the cost of doing business and increase Kenya’s regional and global competitiveness. Between March and May of this year, the World Bank opened seven tenders under the Kenya Electricity Expansion Project. Launched in 2010 with an initial $330 million budget, KEEP was designed to broaden access to electricity in urban, periurban and rural areas, and develop sources of green energy. Listed below are the tenders released under World Bank’s energy project in Kenya. ▪ Procurement of Distribution Transformers ▪ Procurement of Treated Wooden Poles ▪ Procurement of Surge Diverters, Circuit Breakers, Air Break Switches and Insulators ▪ Procurement of Conductors, Cables, Stay Wire and Binding Wire ▪ Procurement of Financial Advisory Services ▪ Design, Supply and Installation of 33 kV and 66 kV Lines ▪ Construction of 33 kV and 11 kV Power Lines Previous International Development Association contributions to Kenya show that the energy and mining sector has remained a constant area of focus in the country, receiving an average $31.07 million over the past five years. Earlier this month, the World Bank renewed its commitment to Kenya with the release of its most recent country partnership strategy, which builds on previous efforts in the country’s energy sector. Check out more practical business and development advice online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.