Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Press Releases: KES12bn Investment in Rabai Power Plant

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Kenya: Press Releases: KES12bn Investment in Rabai Power Plant

Thursday, 09 October 2008

The Rabai Power Plant is the largest single investment (KES12bn) in Kenya since the establishment of the new administration and will be delivering much needed power to the national grid before the end of 2009. The output (90MW), sufficient to provide power to up to 400,000 households, will be sold to Kenya Power & Lighting Company Ltd. (KPLC), through a 20-year power purchase agreement. The project was awarded on a build-own-operate-transfer basis through an international competitive bidding process. Leading the project are two experienced sponsors, Aldwych International Ltd (Aldwych) and Burmeister & Wain Scandinavian Contractor A/S (BWSC).

Rabai power plant will provide a much needed stable source of electricity that will contribute to economic growth and combat crippling power shortages. The new plant, located 20 km from Mombasa, will be not only the most efficient thermal fuel plant in Kenya but also one of the cleanest, as it will be operated to meet stringent international environmental and social standards.

The Rabai plant will provide significant financial benefits to Kenya. Following commercial operations, BWSC and Aldwych have forecasted savings of billions of Kenya shillings as the Rabai plant will displace some of the older and more costly emergency diesel plants that are currently being used to bolster the constrained Kenyan power supply.

In addition to its positive financial impact, the Rabai project has other notable benefits for Kenya.

The investment of KES12 bn will give a significant boost to the Kenyan economy, providing many new job opportunities in the construction and service industries as well as to the local community.
The addition of much needed new generating capacity will help reduce the recent electricity rationing.
During the construction period, up to 300 people, both skilled and non-skilled labour, will be employed on site. It is estimated that, in total, over 1,000 jobs will be created through direct and indirect employment from the project.
Following construction, Aldwych and BWSC will subsequently employ 50 Kenyan technicians to manage and oversee the daily operation and maintenance of the plant.
A Corporate Social Responsibility policy will be implemented at the Rabai plant, which in turn will directly benefit and endeavour to protect the interests of both the local and the wider community.
Rabai will operate the plant in conformity with stringent environmental and social requirements.
The Rabai plant will partially displace less efficient plant and reduce the need for expensive back-up diesel generators, with associated environmental and cost benefits.
Private sector financing of Rabai will enable the Government of Kenya to conserve limited public resources for other priorities.

“As developer and contractor of the Rabai power plant, we at BWSC are very proud to have been associated with the development of this vital project and awarded this important milestone. We are looking forward to becoming part of the Kenyan community and to participating in the country’s further development and prosperity”, stated Søren Barkholt, Executive Director at BWSC.

“Electricity is fundamental to Kenya’s economic prosperity and development. In implementing the Rabai project we will do our very best to contribute to the Kenyan goal of providing a reliable and cost effective supply of electricity for the whole country”, stated Mark Fitzpatrick, Managing Director of Aldwych.

The task of developing, financing, constructing and operating the 90MW diesel engine based power plant was awarded to Aldwych and BWSC on 30 November 2006.

“I am thrilled to have such experienced and professional sponsors responsible for the construction and operation of the power plant. For Kenya, the project is a vital catalyst for the further development of the country, and I am confident that the sponsors will fulfil all their obligations. I wish them every success in their new venture”, emphasised Joseph Njoroge, Managing Director and CEO of KPLC which was responsible for awarding the contract.

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