Kenya Electricity Generating Company (KenGen) will spend Sh166 billion to put up wind and geothermal power plants in the next two years.
The additional generating capacity estimated to be 460 megawatts is expected to significantly reduce reliance on fuel driven generators and ease the cost of electricity.
Much of the funds will be sourced from bilateral lenders in form of loans while a small portion of the funding will come from the company's internal resources.
"The country's demand for power by 2020 is expected to cross the 3,000 megawatts mark. We do not want to miss future growth opportunities simply because the capital required now seems unaffordable," KenGen's managing director Albert Mugo told shareholders at the company's Annual General Meeting held on Wednesday.
The company is planning to put up a 100 megawatts wind farm in Meru at a cost of Sh13.4 billion (120 million Euros) to be funded by the French Development Agency (AFD) and KfW of Germany.
It will also add 10 megawatts to the Ngong Wind farm at a cost of Sh1.9 billion (17 million Euros) from the government of Belgium.
Belgium has financed the Ngong wind project to a tune of Sh2.5 billion (22 million Euros) to produce 12 megawatts of wind power. The farm currently has an installed capacity of 26 megawatts.
The expansion in geothermal power production will involve installation of a 140MW plant at Olkaria V, a 70 MW unit at Olkaria I and a 140MW plant at Olkaria IV through a joint venture arrangement.
The company is seeking to raise Sh30 through a rights issue to enable it pay off some debts in order to allow room for fresh borrowing to finance its planned projects.
The cash call has been delayed by a year as the government which holds a 70 per cent stake has not made a commitment regarding how it will take up its rights.
KenGen owes Sh43 billion to government and there was a proposal to convert part of this debt into equity.
