Kenya has reached a Sh9.8 billion financing deal with the French government to help instal key security and other operation equipment at the Jomo Kenyatta International Airport (JKIA) which is undergoing expansion.

France's foreign secretary in-charge of trade, Mrs Anne Marie IDRAC, said on Wednesday the funding would be channelled through her government's development assistance arm, Agence Francaise Development (AFD), and the equipment upgrade and installation done by public limited company, Aeroports de Paris.

The Kenya Airports Authority (KAA) will shortly sign an agreement with AFD over the financing of the airport operation and security equipment," she told a news conference in Nairobi.

JKIA is currently being expanded and modernised through a multi-faceted programme to help it handle large fleet and comply with preferred international safety standards.

Phase one of the project, which was completed in late 2008, saw the airport increase its aircraft parking space and add two taxiways at a cost of Sh3 billion.

The second phase will see JKIA boast a new terminal and parking space increased with the construction of a three storey car park to accommodate 1,500 cars.

The tender for second phase was awarded to Chinese firm, China National Aero-Technology International Engineering Company (CATIC) in September 2009 at a cost of Sh4 billion.

Phase three, expected to cost $95 million (Sh7 billion), will involve the expansion and renovation of current terminals with the construction of another floor that will enable the separation of incoming and outgoing passengers.

Apart from the airport deal, Mrs IDRAC said her government was also keen on helping Kenya improve her key infrastructure facilities such as ports and green energy establishments.

"Energy infrastructure is critical for the growth of emerging economies such as Kenya and we are keen to help on the fronts of geothermal and solar power production," she said.

Kenya is currently hard-pressed for new energy sources as projections by the Energy ministry showed that the country requires at least 2,013MW in additional power supplies to the national grid by 2014 even though such expectations have been watered down by difficulties in accessing finance to bankroll the construction of new power plants.

Recent analysis

To underline the gravity of the situation, statistics showed that Kenya has an installed power capacity 1, 480 mega watts, including temporary emergency power of 290, but is currently supplying about 1050 megawatts at peak time.

Data further showed that the country's current power reserve capacity -- the difference between power demand and supply -- has wilted to record levels of 65mw or 5.6 per cent of the effective demand which is well below the reserve limit of 15 per cent, hence the push for additional generation by the government.

A recent analysis by the World Bank further said that the country's power crisis including supply and costs eats up about 1.5 per cent of the country's GDP in lost business opportunity besides weakening the country's competitiveness in attracting fresh investments.

This has triggered concern that the country could run short of power from 2012 if new power plants do not come through as demand for electricity is set to surpass supply.

French ambassador to Kenya, Mrs Elisabeth Barbier told Business Daily that talks were ongoing between her government and Kenya over the possible financing and supply of drilling equipment for geothermal wells in the Rift Valley.

"There are ongoing discussions on how France could assist in the supply of equipment to drill two geothermal wells around the Ol Karia area," she said on the sidelines of the press briefing by Mrs IDRAC.

The foreign secretary, however, said though France was keen on firming its development corporation ties with Kenya, local leaders had to commit to institutional reforms and the fight against corruption.

"The leaders must also fight corruption and work towards the improvement of the business climate so as to attract even more investors," Mrs IDRAC said.

Statistics by the French embassy in Nairobi showed that as at 2008 the value of total trade between the two countries stood at Sh25 billion while French investments in Kenya rose to more than Sh90 billion.

The data further claimed that French enterprises in Kenya currently employed 10,000 people in sectors like telecommunications, transport, construction, energy and horticulture. (From allafrica.com -click here to go to the source)