Home > All Stories > No power rationing, never will-Ministry

No power rationing, never will-Ministry

The government has strongly refuted reports circulating in the media that people should brace up for more power woes following failure by the electricity utility firm Tanesco, to secure a loan amounting to Sh 408 billion from Citibank to finance emergency power projects.

Eliakim Maswi, the Permanent Secretary for the Ministry of Energy and Minerals, has declared that all procedures for the loan facility were on the right track and soon the funds will be secured.

Speaking exclusively to the Guardian on Sunday in a brief telephone interview yesterday afternoon, he said that by all standards any creditor wishing to issue such a big loan must be absolutely certain of the applicant’s ability to repay it.

He said the same doubt was embraced by Citibank last year when negotiations with the power company over the loan started, compelling Tanesco to review power tariffs by 40.2 per cent in January this year to come closer to the bank’s terms.

He said after the review of power tariffs talks between Citibank and Tanesco were held and the two sides basically struck a deal before starting to work on the financial agreement or mode of contract.

However, he said, since the mode of agreement advanced to the debtor by the bank was not congruent with other government modes, the government sent its copy to the bank so as to make the two sides come to a middle point, he said.

Mr Maswi said having seen the government’s type of mode as guarantor, Citibank was compelled to contact its lawyers abroad (probably at Citibank headquarters) for consultation before sealing the deal.

“ Tomorrow (Sunday) at around mid day or on Monday we are going see Citibank officials to get the feedback after we gave them the copy of the Mode of Contract because consultations with their headquarters have already been made,” the top ministerial executive official indicated.

He said people should understand that Sh 408 billion being sought from the bank as loan was a huge chunk of money that needed thorough attention in its processing.

Due to this factor, Citibank could be compelled to seek help from other banks such as the National Microfinance Bank (NMB) and NBC to form a consortium to raise that sum of money.

Securing the Sh 408 billion loan from Citibank is part of the government’s efforts to put to implementation the government promise made in Parliament last August of raising Sh 1.24 trillion to end power woes in the country.

The Sh1.24 trillion plan announced by Energy and Minerals Minister William Ngeleja at the time focused on power generation, that it be raised to 882MW by the end of this year. The minister told the House that the government would act as guarantor to enable Tanesco to borrow funds from local banks.

Refuting claims on power rationing, Mr Maswi said power users should not have anything to worry about as Tanesco had no plan to institute load shedding as it is claimed by sections of the public and the media.

“I am strongly refuting claims that Tanesco is silently carrying out load shedding and I can assure the public that there will be no power rationing,” Mr Maswi, the ministry’s top civilian official, stressed.

Supporting his argument, the permanent secretary explained that the state of hydropower generation in various hydro stations was fine, brushing off the much touted rumor that this was the principal cause of looming load shedding.

He said power interruption that some customers have been experiencing in recent days were caused by the breakdown of heavy duty power transformer at the city centre sub station, compelling Tanesco to swiftly construct an emergency power line from Makumbusho to Morocco power station to feed the city centre.

Tanesco has bought two other transformers to replace the wrecked transformer at the city centre sub-station, he added.


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