In less than a year, John Watindi, the manager at Petma restaurant on Kimathi Street, Nairobi, has seen his company’s power bill rise by more than 30 per cent.

“It’s really hurting us. We used to pay an average of Ksh30,000 ($3,448) for power last year. Last month we paid Ksh43,000 ($4940),” he said.

Mr Watindi’s story mirrors the growing challenge that businesses in Kenya face due to the rising energy costs and relative unreliability of power supply, occasioned by the country’s high dependence on diesel-powered power plants.

But Kenya is seeking to change this narrative in the coming months, as it embarks on power projects expected to cost $17.5 billion over the next 40 months.

David Chirchir, the Cabinet Secretary for Energy, says the projects are supposed to add 5,000MW to the national grid in three years.

“We need at least 1,000MW to run the standard gauge railway in the next three years,” said Mr Chirchir at an economic conference co-hosted by the National Treasury, the Central Bank of Kenya and the International Monetary Fund.

Manufacturers have complained of the high cost of power, which is estimated to be double the rate in Egypt, a factor that has eroded Kenya’s competitiveness.

Kenyans pay average $ 0.18 per kilowatt hour, and manufacturers want this brought down to $0.08 per kilowatt hour.

“We need to reduce the expensive emergency power that has become permanent in Kenya. So, whatever brings down the cost down to 8 cents is welcome,” said Vimal Shah, the chief executive of Bidco Oil Refineries.

In the next 40 months the country plans to add 1,600MW from geothermal sources, 1,920MW from coal-powered plants, 420MW from hydro, 650MW from wind and 700MW from the liquefied natural gas plant at Dongo Kundu in Mombasa.

While KenGen will be the anchor investor in most of the projects, the plan relies heavily on independent power producers.

General Electric (GE) Africa is among the players expected to help meet the 5,000MW target. The company’s chief financial officer Thomas Konditi said they plan to set up a 900MW power park that will use natural gas in Kitengela in Kajiado County. GE will own 10 per cent of the wind power plant known as Kipeto Energy located near Kiserian in the same county.

The Kenya Electricity Transmission Company (Ketraco) is expected to start construction works on a 50km 400kV double circuit line from Dongo Kundu to Mariakani at a cost of Ksh4 billion ($47m) in January 2014.

Mr Chirchir said that Kenya is negotiating with Qatar for a government-to-government deal that will allow it to purchase natural gas at concessional prices and make it available to the independent power producer, who will then run the proposed 700MW liquified natural gas plant.

The government is expected to tender for the project in the next three months. Ministry of Energy officials told The EastAfrican that Kenya had started negotiations with Tanzania on gas imports.

The country also plans to build two 960MW coal-powered plants in Kilifi and Kitui counties respectively.

Reported by Peterson Thiong’o, Steve Mbogo and Kennedy Senelwa