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{
    "id": 21642,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/21642/?format=api",
    "text_counter": 811,
    "type": "speech",
    "speaker_name": "Mr. Okemo",
    "speaker_title": "",
    "speaker": {
        "id": 198,
        "legal_name": "Chrysanthus Barnabas Okemo",
        "slug": "chrysanthus-okemo"
    },
    "content": "Mr. Temporary Deputy Speaker, Sir, I wish to second the Motion. As of today, the installed generation capacity in Kenya is 1,400 megawatts. Out of that installed capacity, KenGen accounts for 75 per cent, which is about 1,056 megawatts. The demand for energy is growing daily. Therefore, according to Vision 2030 Plan, the amount of generation of electricity in Kenya is supposed to increase to slightly over 15,000 megawatts. Today, we are at 1,400 megawatts. This is basically to emphasize the urgency, need and importance of supporting KenGen to try and achieve the generation capacity of 15,000 megawatts. These three sessional papers are requesting for three loan guarantees to be given to KenGen. Basically, the sovereign guarantees do help to make the loans more favourable because the sovereign guarantee reduces the risk of default in case of one. Therefore, the amount of interest rates, borrowing terms and the length of borrowing are now on more favourable terms as a result of the sovereign guarantee that KenGen is requesting from the National Assembly. Mr. Temporary Deputy Speaker, Sir, we looked at the danger of default because we have a number of cases where a number of local authorities and other corporate bodies that are publicly owned have defaulted. That has led to the Government to take over the loans and repay and, therefore, becomes a burden on the taxpayer. We, very thoroughly, looked at the ability of KenGen to service those loans and we are satisfied that it will have the ability and capability to service the loans, and that they are adequately secured. You can only go for a loan guarantee when the security that you have cannot realize the amount of money that has been borrowed. In this particular case, the power purchase agreements which have been signed between KenGen and Kenya Power and Lighting Company (KPLC) - which is the distribution company - guarantees that all the power that will be generated will have a market. Therefore, even in the unlikely event that they were to default, the financiers have the power – or even the Government now having guaranteed – to take over the assets, manage them and generate sufficient finances to repay the loans. I, therefore, would like to request the National Assembly to approve these three requests; Sessional Paper No.1 which requests for about Kshs5 billion which will lead to an additional 32 megawatts from the Kindaruma Hydropower Project; Sessional Paper No.2 which is asking for Kshs7.5 billion which will produce about an extra 140 megawatts of geothermal power; and Sessional Paper No.3 is asking for Kshs33 billion, that is 29.5 billion Japanese Yen – which will produce an additional 140 megawatts. I think this is a very straightforward case. There were issues about governance, among other things, and we said that those are ongoing. Passing the guarantee here does not stop the relevant committees from continuing to look into governance issues and issues that were raised during the meetings. I, therefore, would like to second and ask the National Assembly to approve."
}