IRIN Focus on the energy crisis

As the Kenyan authorities on Thursday awaited a decision by the International Monetary Fund (IMF) on the resumption of funding, the entire country experienced an unprecedented power blackout last Saturday. Energy officials said it was caused by major breakdowns in generating and transmission facilities both in Uganda and the Kenyan port city of Mombasa. It was the most severe cut since power rationing was intensified in June, with critics saying it exposed how much Kenya relied on Uganda for energy. Apart from causing distress to both domestic and industrial consumers, major facilities throughout the country were plunged into complete darkness, raising fears that numerous patients in public hospitals were at risk. “This was just a small indication of what is in store for Kenyans if this mess is not sorted out,” an angry economist and city resident told IRIN. “We never learn from our mistakes.” The Kenyan government is adamant that the situation is due to a severe two-year drought which has gravely affected water levels in the country’s reservoirs. Regional analysts, for their part, say it is a “classic case of lack of proper management and foresightedness on the part of the government”. Several donor countries have shown signs of sympathy towards Kenya’s plight and have responded positively especially with donations to the famine relief kitty, but for the energy sector, the message seems to be clear that the current situation could have been prevented or eased. The Kenya Power and Lighting Company (KPLC) on Wednesday said it had nothing to do with the current crisis. “We are just distributors and not suppliers of power,” the organisation’s spokesman told IRIN. On Friday, World Bank Country Director Harold Wackman, in a statement said the crisis was more a result of “long delays in the implementation of the planned projects than the failure of the long rains or the suspension of World Bank funding”. The government has on various occasions also blamed an aid freeze by the Bank as being partly to blame for the current problem. But, Wackman said, “negotiations between private investors, KPLC and the government for these projects dragged on for long periods, despite the obvious consequences of increased power shortages as a result of delays.” The Bank withheld financial support to the sector in the early 1990s, after raising concerns about Kenya’s poor economic governance, reluctance to reform the power sector and poor investment decisions. It, however, resumed lending to the sector in 1997 and approved a credit of US $125 million for the Energy Sector Reform and Power Development Project. “This was only after significant progress was achieved in the pricing of energy, restructuring the power sector, opening up power generation to private sector investors and reforming the legal and regulatory environment,” Wackman said. Seven new power plants with a total capacity of 460 megawatts were expected to be commissioned between 1998 and 2000. Five of the projects were to be completed in 1999, one in 2000, while the last had no specific completion date. Two of the projects were completed last year, the rest had the dates revised to between 2001-2003. Some 609 mw of new generating capacity should have been available by now, the Bank noted, adding that this would have increased the total installed capacity from 717 mw to 1,326 mw. “What this means is that despite the prolonged severe drought, and even with the delayed implementation of the Olkaria II geothermal plant [in Kenya’s Rift Valley] being funded by the World Bank, there would have been no shortage of electricity had the original schedules been maintained,” Wackman pointed out. In the meantime, the Kenyan government is negotiating an exceptional credit of US $75 million from the Bank to finance emergency power supply from independent power producers. Under this programme, it is expected that private sector power suppliers, using portable diesel plants, will be commissioned to supply 105 mw of electricity for a period of 6-12 months. The World Bank statement said that once negotiations were concluded, supply was expected in the next six to 10 weeks, most likely by early September. News organisations also reported that Tanzania is considering a request to export power to Kenya and that officials from both countries are scheduled to meet next month. According to the Bank, the situation should improve after October. “If the short rains are adequate and timely, and if the long rains don’t fail next year, it is anticipated that there will be no supply deficit by April 2001,” the statement said. Some energy consultants have taken issue with World Bank’s statement which blames the government for the current crisis, and accuse the Bank of “laying down stringent conditions”. “There are several stages before funding for projects can actually be effected,” the ‘East African Standard’ quoted a consultant as saying. “These include pre-bid meetings, site visits, evaluation of bids, designation of selected bids, execution of Power Purchase Agreements (PPAs), final approval of bank awards amongst others, all of which the World Bank is part and parcel.” As the Kenyan government grapples with the energy problem, the dwindling water supply is another headache for the authorities. Last month, the Nairobi City Council announced stringent water rationing measures for the city. Taps ran dry long before the announcement in several parts of the city, which has led to the mushrooming of illegal sales by water hawkers. They sell 20 litres of water at about 25 US cents, in a city where many people live on less than a dollar a day. However, there seems to be a ray of hope in the water sector with the launch of a new initiative for Nairobi by UNEP and the United Nations Centre for Human Settlements (Habitat) aimed at conserving water. The Chief of Infrastructure Section (Habitat), Kalyan Ray, told IRIN that the programme will include installing water saving devices for commercial and industrial users, encourage recycling and reuse of water especially in industries, ensure a cut in water leakage, introduce proper water pricing and auditing, and work towards curbing water pollution. Ray said Nairobi is one of the seven cities selected to benefit from the ‘Water for African Cities’ programme. The others are Abidjan, Dakar, Johannesburg, Lusaka, Accra and Addis Ababa.