Tuesday, July 13, 2010

allAfrica.com: East Africa: Integrate Energy Use to Cut Cost, EAC Told

by Lucas Barasa and Andrew Doughman, The Nation, 13 July 2010

The East African Community member states have been urged to integrate their energy infrastructure to cut on costs and improve efficiency.

Applauding the start of common market protocol on July 1, French Development Agency director Jean-Pierre Marcelli said Kenya could ease power shortages and drop energy costs by investing in geothermal power and harnessing energy-trading potential with EAC members.

Likewise, Uganda which mainly relies on hydro-power could benefit from Kenya's huge geothermal potential when water levels in its dams fall.

Mr Marcelli said the AFD has provided Sh5.6 billion for investments in geo-thermal power, including drilling wells, which are costly to finance. The AFD is also committing billions of shillings to Olkaria I and Olkaria IV power plants.

"You have an astonishing, unique geothermal power, potentially," he said during a briefing at the Nation Media Group offices in Nairobi Tuesday.

He said that his agency plans to channel Sh2 billion through local banks as credit to small scale investors on energy to upgrade their equipment.

"We want to start with Kenya before rolling out the programme throughout East Africa," Mr Marcelli said.

The investments would mean Kenya would rely less on hydroelectric power, which is not a reliable energy source because droughts can drastically cripple power production.

Currently, power costs more in Kenya than in neighbouring countries, discouraging investors.

Goods from Common Market for Eastern and Southern Africa (COMESA) countries have also been enjoying an advantage in the market due to low costs of production facilitated by low energy costs.

Mr Marcelli was happy that the EAC countries could capitalise on common market to swap energy.

"Integration, sharing your production capacity, is a good way to be competitive together," Mr Marcelli said.

Energy stability

Tanzania, for instance has huge natural gas potential.

Marcelli's comments echo those of other officials, both in government and the private sector, that Kenya needs energy stability.

Once Kenya has a steady energy supply, it can begin to wring efficiencies out of the power system. Energy efficiency, Mr Marcelli said, will also be an important step toward protecting the environment and also attracting investment.

"It's about producing the same, or even more, with less power," he said.

A steady energy supply is part of Kenya's Vision 2030 campaign, which is supposed to catapult Kenya into the ranks of other middle-level economies within 20 years.

Mr Marcelli, whose tenure in the country has ended and would soon be leaving for Egypt, said his organisation had more than tripled its loans to Kenya in the past four years.

On conservation, he said that his organisation would partner with the Green Belt Movement to plant trees on about 3,000 hectares of land in Marsabit.