Ethiopia, Kenya ink power purchase agreement

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The Ethiopian Electric Power and The Kenya Power & Lighting Company PLC signed a Power Purchase Agreement (PPA) for the sale and purchase of 200 MW of energy in the first phase of the power export with expected increase of power export to 400 MW in due course.

The CEO of EEP Ashebir Balcha (Eng.) Managing Director of KPLC Geoffrey Muli (Eng.) and KPLC signed the PPA with the presence of the President of the Republic of Kenya Uhuru Kenyatta and Ambassador Monica Juma, the Cabinet Secretary in the Ministry of Energy of the Republic of Kenya, and State Minister of Finance (MoF) of Ethiopia, Eyob Tekalign (PhD).

The overall investment in the project was $1.26 billion. The World Bank providing a loan of $684m, while the African Development Bank and French Development Agency providing $338m and $118m, respectively. The Government of Ethiopia and Government of Kenya are funding $32m and $88m, respectively.

The Kenya-Ethiopia Electricity Highway Project, also known as the Eastern Electricity Highway Project, where construction commenced in 2016, involved the construction of a 1,068km-long power transmission line from Ethiopia to Kenya, incorporating two AC/DC converter stations at both ends.

The transmission line stretches 437km in Ethiopia and 631km in Kenya. Starting from the Wolayta-Sodo substation, it traverses Arba Minch, Konso, Brindar, Yabello and Mega in Ethiopia. It traverse Marsabit, Samburu, Isolo, Laikipia, Nyandarua, Nakuru, west of Seradupi, Wamba, Rumurutuli, Gilgil, east of Naivasha and culminate at Suswa substation in Kenya, according to MoF.

The project is yet another new export market for EEP expanding its market base in the continent generating significant amount of revenue to the company. The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 to 1.4 million Kenyan households of which 18% will be located in rural areas. 

In a broader sense, the transmission line will in the long run benefit countries in North, East, and Southern Africa through interconnections from Southern Africa Power Pool and Eastern African Power Pool all the way to Egypt and Sudan in the north.

The successful completion of the project is a testament of the strong bilateral relationship between the two countries as well as an example on how regional economic cooperation materializes to the benefit of the continent.

After trail transmission of power in few weeks, full capacity power export is agreed to start in November, 2022.

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