Kenya has received a $320-million soft loan from Japan to boost investments in the energy sector.

Prime Minister Raila Odinga said last week that the money would be channelled into geothermal power generation projects.


Speaking on arrival from a week-long tour of Japan, Odinga stated that Kenya had secured an additional $55-million loan that would be used for drought mitigation and reforestation in the East African nation.

“Japan has embraced our efforts to generate power from clean sources and has committed to helping us finance the projects,” he said.


He added that Japanese Prime Minister Yukio Hatoyama had also pledged assistance for Kenya to develop a nuclear power plant, noting that Japan boasted the most advanced technology in nuclear power production.

The $320-million would be used to implement a 280-MW geothermal power project in Olkaria, in the Rift Valley.
The project, comprising the Olkaria I and Olkaria IV fields, is Kenya’s largest geothermal power generation project, with a price tag of $1,3-billion.

Kenya Electricity Generating Company (KenGen) recently awarded the design and construction contract to Sinclair Knight Merz, of New Zealand, and Shengli Oilfields Highland Petroleum Equipment Company, of China.
The project will entail the installation of four 70-MW power generating 
machines, steam gathering systems, substations, transmission lines and other 
infrastructure. 


The project is expected to be completed in 2013. 


Other financiers of the project include the Kenya government, the French Development Agency, the European Investment Bank, the World Bank, Germany’s KfW and KenGen.


According to Odinga, the Japanese government expressed its willingness to assist Kenya in developing a nuclear energy plant to tackle the country’s power deficit and to reduce carbon emissions from power generation activities.
Currently, Kenya generates about 50% of its power from thermal sources.