Kenya Aims to Add 1,200 MW to Creaking Power Grid

Kenya plans to add 500 megawatts (MW) of electricity to the national grid from natural gas deposits, the energy minister said on Tuesday, taking steps to address chronic power shortages that critics say have discouraged investments.

Davis Chirchir said the government was also considering a second attempt to seek bids for the construction of a 700 MW liquefied natural gas power plant near the port city of Mombasa.

Firms who tendered last year for the LNG plant, initially estimated to cost $500 million, failed to meet the government's requirements for the project, and the tender process collapsed in August.

East Africa's largest economy is struggling with ageing energy infrastructure and the government has said that, in all, it plans to add 5,000 MW to the existing 1,664 MW of generation capacity by 2017.

The country's main power producer KenGen plans to add 70 MW in November by tapping underground steam from the Rift Valley, Chirchir said.

The 500 MW project will harness natural gas deposits discovered in July in north-east Kenya near the frontier with Somalia.

Kenya relies heavily on renewable energy such as hydro power and geothermals for its electricity. Its sole power distribution company serves about 2.8 million customers out of a population of 40 million.

($1 = 89.0000 Kenyan shillings)

(Writing by James Macharia, editing by John Stonestreet)