1. AFRICAN DEVELOPMENT BANK KENYA- SPAIN Multilateral Partnership Meeting Nairobi, 9 December 2013

2. AFDB AND KENYA : A fruitful partnership 1 Since its first operation in 1967, Bank’s cumulative investment in Kenya has reached about USD 3 billion in 2013 Total ongoing portfolio includes 26 projects worth about USD 1.6 billion Energy Sector ongoing portfolio currently includes 6 projects worth close to USD 500 million

3. 2 AfDB and Kenya : Portfolio distribution by sector The ADB Group: three constituent institutions, separate legally and financially, with a common goal Cumulative Investments since 1967Currently Ongoing projects

4. ENERGY SECTOR PROJECTS 3

5. Bank’s strategy in the Energy sector: Inreasing access to electricity through Support to Green Energy Development and Transmission Systems Improvement calls for accelerating access to modern energy while moving to a cleaner energy mix The portfolio in the energy sector currently includes 6 projects under implementation: Menengai Geothermal Development Project Mombasa Nairobi Transmission Line Power Transmission System Improvement Project NELSAP Interconnection project Ethiopia –Kenya Power Systems Interconnection Lake Turkana PRG 4

6. MENENGAI GEOTHERMAL DEVELOPMENT PROJECT USD 147 million Objective The project is part of a larger program aiming at meeting Kenya’s rapidly increasing demand for power while diversifying sources of power supply by developing the country’s huge geothermal potential. Project Description The program will develop the Menengai geothermal steam field to produce enough steam for the construction of 400 MW power generation facilities by IPPs The program includes two phases: (i) the steam resource development through drilling activities; and (ii) the development of the steam gathering system, which gathers the steam produced by the drilled wells and conveys it to the power plants. Project benefits By providing additional installed generation capacity and injecting it into the national grid, the project will result in affordable and reliable electricity supply to more households, businesses and industries. The 400 MW installed capacity will result in 3,154 GWh of additional energy assuming a plant factor of 90% (typical for geothermal power plants). 5

7. MOMBASA-NAIROBI TRANSMISSION LINE- EUR 56 millions Objective The project will allow for the evacuation of power from Mombasa to Nairobi and the interconnected system. Total project cost: EUR 205 millions Project Description: the project consists of the construction of a 450 km 400 kV double-circuit transmission line between Rabai (Mombasa) and Isinya (located 60 km from Nairobi) the construction of new transmission lines from Isinya to Embakasi substation the expansion of the Rabai and Embakasi substations Project benefits economic actors and the population connected to the national power grid into which the project will feed as well as people living along the line route who will be employed or provide services during construction. increase in economic activity (industrial, services, agricultural, commercial) and social wellbeing (households and social institutions) nationally. 6

8. Kenya Power Transmission System Improvement Project USD 71.7 Million Objective The project seeks to build and enhance the transmission infrastructure resulting in increased access, reliability and supply of electricity to rural areas of Kenya Project Description The project consists of construction of a total of 431 km of 132 kV lines, the extension of six substation bays and construction of eight new 132/33 kV substations. will be implemented over a 38 month period commencing in 2011. Project Benefits: The project will result in increased availability of reliable and affordable electricity to rural consumers, which will contribute to connecting 200,000 additional customers per annum, leading to an increase in rural electricity connectivity rate from 23% in 2009 to 40% by 2020. 7

9. NELSAP Regional Interconnection project USD 61 million Objective Consists in the construction of transmission lines to connect the electricity networks in five countries: Kenya, Rwanda, Uganda, Burundi, DRC. It will improve the access to electricity in these countries through increased cross- border sharing of energy and power. Project Description: The project consists in the construction and upgrading of 769 km of 110 kV and 220 kV line, as well as the construction and reinforcement of 17 transformer stations to interconnect five electric grids The Kenya-Uganda interconnection component: 400 KV double circuit Kenya- Uganda interconnection (256 km) the line runs from Lessos station in Kenya to Bujagali station passing through Tororo station in Uganda Project benefits The main beneficiaries will be the people, local communities, private and governmental institutions in the five countries, which will have increased access to reliable and affordable electric energy for domestic, industrial and commercial use. 8

10. Ethiopia – Kenya Power Systems Interconnection Objective The project’s development objective is to promote power trade and regional integration, contribute to the EAPP countries’ social and economic development and reduce poverty in those countries. The project aims at exporting the anticipated power supply surplus in Ethiopia to Kenya. This will result in improved supply of electricity in Kenya and other Eastern African Power Pool (EAPP) countries in the long run. Financing : Total project cost: approx. 1 billion Bank financing : USD 345 million ( Kenya component: USD 115 millions) Project Description: Construction of 1068 km of 500 kV HVDC transmission lines and converter stations Project’s management and and supervision consultancy as wwell as capacity building activities and nstitutional support 9

11. LAKETURKANA PRG - EUR 20 millions LAKE TURKANA PRG - EUR 20 millions A Partial Risk Guarantee (PRG) is a financial guarantee extended to commercial lenders to a project, covering payment defaults that result from the nonperformance of a government or a government owned entity on its obligations with respect to the specific project. The Lake Turkana Transmission Line Delay Partial Risk Guarantee supports the Lake Turkana Wind Power (LTWP) Project financed in part by the Bank’s private lending window under a separate operation The PRG will mitigate the risk to Lake Turkana Wind Power Limited and the providers of debt financing to the LTWP Project for risks associated with construction delay in a 428 km long 400 kV double circuit line that will be constructed to carry the electricity generated into the national grid. 10

12. ENERGY SECTOR PIPELINE 11

13. Upcoming projects Rural electrification - Last mile connectivity National power transmission system Regional : Kenya-Tanzania Transmission line project: Geothermal: Steam gathering system and PRG 12

14. CONCLUSION The African Development Bank will remain a premier partner working to transform lives and ensure a sustainable and equitable development. With favorable conditions created for the private sector involvement in the renewable energy development, Kenya is expected to play a major role in the energy market in the region. The Bank welcomes opportunities to partner with key players in the energy sector for potential co-financing or implementation of power projects. 13

15. 14