Japan to Invest US$375 Million in Kenya

Prime Minister Raila Odinga - Securing Financial Assistance for Kenya

Kenya’s Prime Minister, Raila Odinga’s weeklong tour of the South East Asian region is a blessing to a country struggling to protect its water catchments; improve its poor infrastructure and increase electricity power generation. He concluded his official visit to Japan and Thailand on Saturday and announced to Kenyans on his arrival back to the country that discussions with leaders of the two South East Asian nations had placed Kenya on the threshold of remarkable investment plans worthy billions of shillings. On his arrival at the Jomo Kenyatta International Airport (JKIA) in Nairobi early Sunday morning, the Kenyan PM told newsmen that; “Japan has extended a loan of US$375 million (KSh28.8 billion) to Kenya for geothermal power generation, drought responses and reforestation. “Japan has extended a loan of US$375 million (KSh28.8 billion) to Kenya for geothermal power generation, drought responses and reforestation. Of the amount, $320 million (KSh24.6 billion) will be channelled to geothermal power generation while US$55 million (Ksh4.2 billion) will service drought responses and reforestation in the country,” said Raila Odinga who arrived in Japan on Monday evening for meetings with business and political leaders aimed at attracting Japanese aid and investments to Kenya.

He said that as opposed to the past where Kenya criss-crossed the world “to beg” for financial aid, his tour of Japan and Thailand was significant in the sense that it was based on seeking for investments. “We went to seek trade and investment opportunities as opposed to the old habit of begging for Aid. But to cope with the impact of global warming, we encourage promotion of green energy and reforestation projects” he said. The PM, who was accompanied by Finance Minister, Uhuru Kenyatta; Henry Kosgey of Industrialisation, Harun Mwau (Transport) and Nobel Peace Laureate, Prof. Wangari Maathai, said that, his Japanese counterpart, Yukio Hatoyama also offered his government’s assistance for Kenya to develop a nuclear power plant. “As we are all aware, Japan had the most advanced technology in nuclear power production. His Excellency Hatoyama told us that, Kenya can expect additional assistance in other areas of climate change measures,” added the PM.

Japan also expressed strong commitment to support Kenya’s Vision 2030. Under the Vision 2030, the government has outlined 120 flagship projects to be implemented in the first five years. A total of about US$20 billion (Ksh1.6 trillion) will be used to establish and complete the projects. The government is expected to raise US$6.25 million (Ksh500 billion) for the projects, whereas the remaining US$13.75 billion (Ksh1.1 trillion) will be raised through a private-public partnership. Hatoyama said Japan will support Kenya’s desire for expanded trade and investment. He pledged to push for increased exports of Kenyan products to Japan and an increase of Japanese tourists to Kenya, and greater investment of Japanese private companies in Kenya. The PM said the Japanese people wanted to assist the country develop a nuclear energy reactor to bridge the power deficit the country experienced in bid to reduce carbon emission from other sources of energy. He said the Toyota Company expressed interest to invest in the geothermal and solar energy production.

Mr. Odinga reported that top executives of the multinational company sanctioned plans for construction of an oil pipeline and export terminal from the Proposed Lamu Port in the Coast of Kenya to Juba town in Southern Sudan. “The company has confirmed plans to make Kenya a logistic hub by September this year and also put up 30 mega watt solar energy generation plant in Garissa town.”  He said the Thai government pledged to promote bilateral ties with Kenya through investment in the energy, Agro and Fruit processing industries for the mutual benefit of both countries. “I am now optimistic that Kenya is likely to make major strides in mitigating the effects of climate change now that main players like Japan have made efforts to bail out vulnerable countries,” Raila said.

The destruction of the Mau Forest Complex by illegal settlers for instance is a major setback to the country’s economy following its value in terms of the support it provides to tourism; and hydro-power generation. It contains the catchment areas for many of

Kenya’s most important rivers. Last year, the UNEP unveiled the “Atlas of Our Changing Environment”, a comprehensive visual overview of the nature and extent of human impact on the planet which displayed a series of satellite images documenting 35 years of incremental destruction of forest area, punctuated by dramatic excisions. According to the Unep, Extreme land-cover changes such as these can have serious consequences both within the forest and downstream in the form of water shortages, health risks, desertification, habitat destruction, sedimentation, erosion, and even alteration of the micro-climate. This rate of forest loss is unsustainable and threatens the security and future development of Kenya.

Besides; these activities have threatened the use of valued indigenous forest products such as: fuel wood; charcoal, hunting, forest food, medicinal plants, grazing, forest fibres, honey, and pole wood. The Government of Kenya requires an estimated US$135 million to restore forest complex. The PM’s trip to Japan follows a number of requests made by President Mwai Kibaki to the Japanese government recently when he held talks with a Japanese delegation led by the vice Chairman of Japan-Africa Union Parliamentarians League, Tetsuro Yano who paid him a courtesy call. Kibaki said the Mau Forest Complex was an important catchment area for the Sondu Miriu River whose water levels had drastically reduced and would affect the hydro power station. Japan is funding phase two of the Sondu Miriu hydro power station at a cost of US$1 million (Ksh. 7.6 billion), a project that is complete and awaiting commissioning, having also funded by way of a loan phase one at a cost of US$160 million (Ksh. 12 billion).

Kibaki asked the Japanese Government to consider financing the Ol- Karia IV Geo thermal project whose assistance he requested during a visit to Japan. Kibaki had also requested the Japanese authorities to give Kenya airways landing rights to start direct flights to Tokyo in order to see a single delivery of its flowers to the South East Asian nation since the product was being delivered there through a third country in Europe. He also sought assistance to put up a structure for the inspection of Kenyan flowers at Jomo Kenyatta International Airport before export to Japan in order to maintain quality and freshness.

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