@mkonomtupu..
i think a 10:1 split would be the best way for KPLC to go...

to me more power plants for kengen and the like just represent higher cost of production and higher supply for KPLC not excitement...

about KPLC'S mandate... in my view what GOK is doing as something very good for the company as KPLC doesnt have to bare the costs and debt of expanding the national grid but at the same time can reap big since it will lease and manage all the assets that will be set up thus maintaining its monopoly...

i ask you now... would you buy into a brewer who faces higher costs and increased competition or would you buy into the pub franchise that faces lower costs and lifelong monopoly????

Something must be wrong at Kengen. How else do you explain the cost of generation? I think Kengen is the single biggest impediment to Kenya's development. Their strategic direction is flawed and will contribute to our non achievement of Vision 2030. Kibaki has even given up and signed Power Purchase Agreements with Ethiopia!!

If you look at the costs of projects, you'd be amazed. Kengen has committed Billions of US$ to produce paltry amounts of energy. The CEO is on record even commissioning Sangoro (20 - yes ISHIRINI- MW for 4.6 billion before overruns). Surely there must be an error in the figures? He commissioned 280 MW Geothermal for 100 billion. Over 1.5 billion for 10 MW Ngong Wind (if compared with the private sector Turkana wind - 150million for 300 MW, the Ngong Wind project is priced 5 times, using simple arithmetical inference).

A single Nuclear Power Plant would cost less than Kengen's capital outlay and contribute to ALL of the energy needs with surplus. Granted, there will be hulabaloo on a Nuclear Kenya but then we have to first pursue this and be denied rather than not try. For Heavens sake Algeria and Armenia have Power Plants. You just need to look at Egypt's target additions to its Grid vs Kengens to see where our vision 2030 lies..

....The Ministry of Electricity announced that they have secured 90% of the financing for the upcoming five-year power expansion plan (2007-2012) with a total investment of $6.5 billion. This aggressive plan targets an increase in domestic electricity production by another 8.38 gigawatts (GW)….

@mukiha. I think it was also part of the reform policy for the energy sector to support KPLC at all costs...I remember reading a 2003 policy report where they suggested three crucial reforms (1) Make KPLC profitable to attract investors (2) Give power producers direct access to large consumers (3) provide political risk insurance (or something like that) to bring in foreign investment...number 2 & 3 are not yet done...

But I think future energy policy should be modelled on the Turkana Wind program...sourcing for clean energy IPPs and use BOOT agreements to set up transmission lines directly to large consumers ...maybe an incentive to develop infrastructure...reduce reliance on the one retailer.

@kerabu901. I think those estimates are too high, the Kengen pibo doc had better ones. The SA power situation doesn't look to bright either (I think they have nuclear) read below.

http://www.bloomberg.com...116&sid=aRY60cN3G0V4

Interesting debate. Me I go for KPLC. Here are my main reasons:

1. Kengen is a 'bit' player (a big bit, yes, but a bit). KPLC is a quasi monopoly

2. Kenya's power costs will have to come down even as generation capacity goes up - otherwise forget vision 2030. Who will lose more - the generator, with inflexible capital costs already sunk or the distributor who seems to have figured out scalable pipelines and costs?

4. Total debt, invested capital and prospects for future returns are important factors in determining share value. Kengen will have to load up on debt for at least 20 years to meet their objectives, even as their margins qet squeezed by market and policy factors. Meanwhile KPLC is sitting pretty as a glorified, but very profitable, plumber

5. Finally and, most important, KPLC seems to have a better strategy team working for them than Kengen (I never thought I would say this). Kengen needs to clean house - starting with Njoro - before they can be taken seriously.

Mukiha, cost per kW that only kicks in after you have set up the plant in the first place. Here are some solid facts the Olkiluoto plant in Finland expected to generate 1600MW has an overall project cost of 3.2 billion Euros. Nuclear power stations are extremely expensive to build.
Nuclear physics is not complicated but running a nuclear power plant is complicated business. Enough of the pipe dreams let's discuss Kengen