While the agenda at the recently concluded US-Africa Summit included such things as governance and education, the underlying motivation was business with Africa.

But the first notion we must dismiss is that this was about America offering aid to Africa. The summit was more about aid to American companies to enable them get a foothold on the continent where Asian companies have entrenched themselves.

The so-called aid generally works like this: America provides funds towards certain projects. US firms implement those projects. Depending on the recipient country’s due diligence and proper cost-benefit analysis, both nations benefit.

For Kenya, the most visible outcome of this summit is funding for power projects. Under the US Power Africa Initiative, six African countries – Kenya, Tanzania, Ethiopia, Nigeria, Ghana and Liberia – will benefit from a $7 billion (Sh615bn) fund for power projects both on-grid and off-grid.

The World Bank announced during the summit that it would provide an additional $5 billion (Sh439bn) towards the initiative. Several other banks including Standard Bank of South Africa have also pledged funding for the same.

American companies such as General Electric, General Cables among others are gearing up to benefit from this funding to do business on the continent.

In need of serious funding

This is particularly significant for Kenya which is in the process of scaling up the installed power capacity to over 5,000mw. Currently we produce about 2,000mw.

This is hardly enough. Aliko Dangote, the Nigerian cement tycoon, for instance, told government officials the last time he was here that he would need about 1,000mw for a cement plant he plans to put up in Kitui.

The ministry of Transport, likewise, has indicated that it would need about 700mw for the standard gauge railway line service. These two ventures could thus gobble up what we produce currently.

Primary beneficiaries will be the big players in the energy sector – KenGen and GDC in exploration and generation, Kenya Electricity Transmission Company (Ketraco) in transmission, and Kenya Power in distribution and retail.

All these state players are in need of funding. KenGen, which recently added 140mw of geothermal power to the grid, and expects to add another 140mw by the end of the year, is looking to exploit a further 560mw in the same Ol Karia area. It needs funding and the Power Africa initiative could come in handy.

Ketraco, which was hived off from Kenya Power to focus on building power transmission lines, is fully-government owned unlike its siblings and, therefore, relies completely on state funding.

It is in need of serious funding especially because the amount of new power expected to come on stream cannot be handled by our fragile grid. Some of the proposed power plants will generate much more power than the current lines can handle.

There is 300mw coming from Loiyangalani – the Lake Turkana Wind Power project. We have 400mw coming via a high-voltage Direct Current line from Ethiopia to land at Suswa.

There is a 900mw liquefied natural gas power plant to be put up at Dongo Kundu in Mombasa; a 900mw coal fired plant in Kitui and an expected 1,200mw to be generated from Menengai. There is also the 61mw expected from the Kinangop Wind Park project to be commissioned next year.

Kenya can benefit from the US initiative immediately because these projects are ready for implementation if funding is there.

But crucially, government will need to have an organised end-to-end approach from generation to consumption.

It is one thing to generate the power but quite another to distribute it and to ensure it is taken up. Currently, 60 per cent of the power produced in Kenya is consumed by industry. Households barely consume 30 per cent. Along the way about 18 per cent of this power is lost through system leakages and theft.

It will be in order then for some of this funding to go to strengthening Kenya Power’s systems to reduce these losses. This will include removing bureaucratic barriers; for instance, power in Nairobi is unstable because Kenya Power cannot put up a ring around the region to stabilise it.

This is a responsibility that Ketraco has adamantly held onto yet it has to wait to get funding to do it. Kenya Power, which could build the ring with its own funds, is left to fire-fight blackouts. A holistic approach can deal with this.

The ministry of Industrialisation will also have to develop the market for the uptake of the generated power. This will include wooing industries to set up shop in the country to ensure we don’t have idle power plants.

Government could, for instance, insist that much of the funding from the US goes towards geothermal generation in Ol Karia and Menengai. Then it can partner with KenGen to put up an industrial area in Naivasha where companies will be fed power directly from generation, making it both cheaper and more reliable.

Private sector companies interested in the power sector also stand to benefit if they have their projects planned. The US Development Fund with General Electric are running competitions for innovative clean energy projects.

Opportunities exist especially in those areas that are not served by the national grid. Wind and solar initiatives in northern Kenya, for example, stand to benefit.

At the end of the day, the bottom line of these initiatives is business and Kenya must approach it as such and not as charity.

The writer is a financial communications consultant.