Entry Instance

HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept

{
    "id": 21650,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/21650/?format=api",
    "text_counter": 819,
    "type": "speech",
    "speaker_name": "Mr. Murungi",
    "speaker_title": "The Minister for Energy",
    "speaker": {
        "id": 93,
        "legal_name": "Kiraitu Murungi",
        "slug": "kiraitu-murungi"
    },
    "content": " Thank you, Mr. Deputy Speaker, Sir. First, allow me to congratulate the Member for Kamukunji, Mr. Yusuf Hassan Abdi. He is very eloquent in his maiden speech. I think in other forums, he would have been given a standing ovation. However, I think Members have appreciated it in the usual way. I have the singular privilege of having known the hon. Member in the dark days of this country, in the 1990s when he gave me refuge in London when he was working for BBC. I can tell you that Mr. Yusuf is a true nationalist and he will give the people of Kamukunji excellent parliamentary service. Mr. Deputy Speaker, Sir, allow me also to thank the chairs of the two joint committees for a very thorough job. They have done a very comprehensive report and as the Minister for Energy, I want to support the conclusions and recommendations that have been made by the two committees. One of the recommendations is that we transfer some wells in Olkaria which are now in the hands of KenGen to GDC because they have been drilled using Government of Kenya funds. I would like to inform the House and Kenyans that that process has already started and that the lawyers are working on the documents of transfer. In fact, the wells are now 59. They are many more than mentioned in your Report. They are 59 wells that we are transferring to GDC. The purpose of the loans for which this Government guarantees are being sought is first to rehabilitate and upgrade the Kindaruma Hydropower Station so that we can increase its generating capacity from 40 megawatts to 72 megawatts. The other loan is to help us to construct two new power plants in Olkaria I and Olkaria IV of 140 megawatts and, therefore, adding another 280 megawatts of geothermal power to the grid. Mr. Deputy Speaker, Sir, I think it is obvious that we are not generating enough power in this country to meet the rising demand. As I am talking, the Kenya Power Company is implementing a power rationing programme which we call road shedding in many parts of this country because we are short of 174 megawatts and our reserve margin is zero. Once we do the routine maintenance of the equipment, the country experiences outages. The entire continent is facing chronic power shortages. This is a common continental problem. In fact, the whole of Africa generates 80,000 megawatts. This is equivalent to what is generated in one country in Europe. Spain also generates 80,000 megawatts. So, all the countries of Africa put together are just like that one country. In this country, we are now at 1,350 megawatts. With the rising demand of about eight per cent per annum we are not able to cope even if our machines are running, there are some Kenyans who will still be in darkness. So, these loans are very important to us. They will also help in our realization of Vision 2030 which as you know intends to move us from a primitive agricultural based economy to an industrializing and modernizing economy. We cannot industrialize without sufficient power. Mr. Deputy Speaker, Sir, the loans being guaranteed are concessional loans attracting very low interest rates and with long moratoria. Since they are Government guarantee, we have been able to go as low as 0.5 per cent which is not possible in commercial banks. A lot of analysis has been done both by this Committee and by the lenders and all of them are satisfied that KenGen can service these loans. The projects being funded are themselves income-generating projects. The power generating projects are also revenue generating projects and they pay for themselves. The Power Purchase Agreements (PPAs) are drafted after long negotiations and the lenders are careful during those negotiations to ensure that whatever they lend can be paid from the investment. However, there have to be other political risks which cannot be captured within commercial agreements, and that is why they require this Government guarantee."
}