The construction work on the African Development Bank (AfDB) launched 1,068km long Kenya-Ethiopia transmission line project will begin in September 2013 at a cost of $1.26bn.
The AfDB funded Eastern Electricity Highway Project is expected to provide cheaper power to Kenya from Ethiopia’s hydro-electricity dams.
Kenya Association of Manufacturers chief executive officer Betty Maina was quoted by allAfrica as saying that the lower electricity costs would result in reduced production costs for companies and cost of living for workers.
"There are many investors who want to venture into Kenya but they are put off by the high cost of electricity. As a result, they flee to neighbouring countries," Maina added.
Kenya Electricity Transmission Company and Ethiopian Electric Power will implement the project, while German engineering firm Lahmeyer International will supervise the project.
The project involves construction of transmission lines of about 437km in Ethiopia and about 631km in Kenya and associated AC/DC converter stations at Wolayta-Sodo substation in Ethiopia and at Suswa substation with a transfer capacity of up to 2,000MW in either direction.
The transmission line project is funded by $338m from AfDB, $684m from the World Bank US, $88m from Kenya, while $32m from Ethiopia. The French Development Agency is also expected to fund $118m for the project.
The project is anticipated to be completed in September 2018.