Future Energy East Africa is celebrating its twentieth anniversary and presence in the region’s energy space.
To mark this significant milestone, Eddy Njoroge, former CEO of KenGen, Kenya, takes us down a historical path to provide an understanding of key sector developments that ultimately led to the current status quo in Kenya.
In the late 1990s, Uganda undertook Africa’s first power sector reform programme to unbundle its generation, transmission and distribution utilities, and offer private concessions for power generation and distribution. This ambitious step eventually inspired the founding roots of Future Energy East Africa.
With a rich history in the region, the publisher of Spintelligent’s power journal, ESI Africa, was approached by Uganda’s utility industry professionals to coordinate a gathering to discuss the issues and share the successes, with the aim of assisting other utilities through the sharing of knowledge.
The East African Power Industry Convention (EAPIC) was born soon after and established itself through the years, moving from one East African country to the other to deliver knowledge to as many professionals as possible. Twenty years on, this professional gathering of industry experts has firmly established itself as the largest and longest running regional power and energy conference and exhibition in the region.
Setting the scene
The 2018 edition of Future Energy East Africa takes place on 12 – 13 September in Nairobi, Kenya at the Kenya International Convention Centre.
As such, let’s set the scene with some information around the state of power in Kenya and the energy sector reforms (ESR), as explained by Njoroge.
In June 1996, the then minister of energy in Kenya said: “The power sector is commercially and financially not feasible. It is inefficient and unable to rise from its own cash-flows the necessary capital required to fix and expand the system to meet the growing demand. The Balance Sheet cannot support any borrowing.”
This statement was the start of Kenya’s reform, which has achieved growth for the country and utility market.
Reform decisions taken
- Reform the power sector’s organisational structure to enable entities to function efficiently on a commercially sustainable basis.
- Create a legal and regulatory environment necessary for private sector participation in the supply of electricity.
- The Kenyan government published a policy paper, Economic Reforms 1996-1998, which proposed the commencement of the separation of generation, transmission and distribution.
- The World Bank granted a $125 million Energy Sector Reform and Development Project (ERSP) Credit facility.
- The Bank provided $3.6 million funding for separation of generation from distribution and transmission functions.
Results of phase one:
- Setting up of KenGen to take over all Government owned generation assets.
- Setting up of Electricity Regulation Board.
- Signing of first two long-term IPPS.
Results of phase two:
- Privatisation of KenGen through an IPO.
- Setting up of REA with a focus on RE.
- Setting up Ketraco to focus on all transmission.
- Setting up Energy Regulation Commission.
- Feed-in-Tariff programme introduced.
Successes of ESR:
- Improved commercial performance:
- 6.4 million customers
- Sales of 7.2GW
- 140 billion
- Access of approximately 60%
- More competition with nine IPPs supplying over 30%
- Higher rural access: 703,000 customers
- More companies in renewable energy
- Geothermal development
Facts about Kenya
- Size: 580,367 km²
- Population: 48 million
- GDP: $70 billion
- Per Capita: $1,500
- Installed capacity: 2,300MW
Facts: Kenya Power (KPLC)
- KPLC is a vertically integrated monopoly
- Installed capacity 817MW
- 85% hydro dependent
- 400,000 customers
- 8,193 employees
- Rural electricity customers 47,000