Kenya Energy Regulator plans to vet all funding options for an ambitious project to increase the country’s electricity supply to 5,000 plus megawatt by 2017, to ensure high cost of accessing these funds does not push up the cost of electricity.

Kenya is seeking to raise up to $8 billion in the next three years to expand its power supply from the current 1,600 megawatts to 5,400 megawatts.

Director General Fredrick Nyang said hundreds of billions to be spend in adding 5,400MW of electricity on the national grid by December 2016 should be acquired at affordable rates, AllAfrica quoted The Star report.

Acquiring fund at affordable rates, Nyang said, will ensure the cost of producing power is in line with the government policy of “reducing electricity tariff and increasing installed capacity of cheap energy sources”.

“The rates will still be determined by the market but we will look at their variation from benchmarks like Libor and similar issues done in those markets previously to ensure the margin is not very wide,” he said.

Kenya Power and Kenya Electricity Generating Company (KenGen) have announced plans to separately mobilize $7 billion to realize the project that runs from September 2013 to December 2016, according to energy cabinet secretary Davis Chirchir.

KenGen will be seeking $5.5 billion to generate an additional 2,500MW-half of government target-while Kenya Power wants $1.8 billion to enhance its electricity distribution network. Independent power producers are also expected to generate the other half of the targeted capacity.

Ministry of energy is evaluating bids from 22 companies including largest listed investment firm, Centum, for separate coal and gas powered plants at Lamu and Mombasa, respectively, in an international tender floated on October 2.