By IMMACULATE KARAMBU
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Kenya Power has secured $25 million (Sh2.25 billion) funding from the Africa Finance Corporation.

The money is part of a $150 million syndicated loan that the company is seeking to fund rehabilitation of its network ahead of absorption of extra 5,000 megawatts of power that are to be generated from the government’s plan to scale up power production by the end of next year.

The terms of the loan remain undisclosed but according to a statement from AFC, the credit will boost its portfolio in the country where it has in the past lent to institutions operating in other sectors such as manufacturing.

“Africa Finance Corporation has announced the provision of a $25 million loan as part of a senior unsecured syndicated loan facility to the Kenya Power. The facility is for the rehabilitation and expansion of Kenya Power transmission and distribution network to increase its capacity,” it said in a statement last week.

This comes a week after the Energy ministry announced that it had secured funding from the World Bank that will be used to offset loans acquired by Kenya Power from commercial banks, which are often priced higher than credit from bilateral lenders.

Last November, Kenya Power signed an agreement with Standard Chartered Bank for a Sh17 billion ($190 million) loan that is part of the total amount it intends to spend on upgrading its network.

Settle outstanding loan

Part of the money was to be used to settle an outstanding loan of Sh6.2 billion ($70 million) it had with the bank.

Company managing director Ben Chumo said the institution was in talks with the Exim Bank of China for a Sh9.2 billion ($103 million) debt while the rest of the funds are to come from the World Bank.

The power distributor has budgeted to spend Sh54 billion ($595 million) in the current financial year for network upgrading that will see installation of new substations and power lines to reduce losses from the current 17.5 per cent to 15 per cent by 2016.

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