Kenya's KenGen plans to raise $5.5 bln by 2018 to double capacity
NAIROBI Oct 30 (Reuters) - Kenya's main electricity producer, KenGen, plans to raise $5.5 billion in debt and equity between now and 2018 to finance plans to more than double generating capacity.
The east African nation faces frequent blackouts due to generation shortfalls and an ageing grid, forcing most businesses and wealthy people to have stand-by generators.
The country's average daily electricity demand stands at about 1,700 megawatts (MW), against supply of 1,600 MW mainly from rain-fed hydroelectric generators, but is working to increase its geothermal power generation.
Simon Ngure, KenGen's acting managing director, told reporters the company plans to generate 2,500 megawatts of additional capacity in the next four years.
"The money will come from a split of equity and debt. We will maintain an equity to debt ratio of 70:30," Ngure said, adding that 70 percent of the funds would come from development finance institutions, and the remainder from joint ventures.
The firm, which has a 1,239 MW installed capacity, has 157 MW of geothermal capacity and is planning to generate an additional 350 MW of geothermal power by the end of 2014.
Kenya is the first country in Africa to tap the vast quantities of hot steam in the earth's crust for geothermal energy, which requires big investments up front, mainly due to expensive drilling of wells.
Geothermal power is considered more reliable than hydropower generation, particularly in periods of drought.
Ngure said geothermal power generation would hit 500 MW by December next year, and that figure would rise rapidly over the following four years.
Kenya has the potential to produce an estimated 7,000 MW of geothermal energy and is targeting output of at least 5,000 MW by 2030 to reduce a reliance on hydro generation. (Reporting by Kevin Mwanza; Editing by James Macharia and Pravin Char)
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