Telecommunications company Safaricom has proposed spending $300 million in deploying the smart meters and plans to operate the infrastructure for eight years to recover its investments.
According to Reuters, the telco filed a proposal with utility Kenya Power for the installation of smart meters with the purpose of reducing non-revenue electricity and enhancing grid monitoring and management.
The 330,000 smart meters, transformers, and feeders that Safaricom is planning to install will see $651.23 million in return on investment over a period of eight years, of which Safaricom plans to take 75% and provide Kenya Power with 25%.
Safaricom claims the smart meters will help the utility to reduce annual power system losses of 23.46% on its transmission network, which are above the global benchmark of 15%, by 8% points within two years.
The proposal comes at a time the shares of Kenya Power have reached their lowest level due to the high energy transmission losses and a huge debt that are hindering the utility’s performance.
The IoT-enabled smart metering system will allow Kenya Power to respond to grid changes in near real-time, a development that would help improve customer services and increase consumer energy efficiency.
The smart units are expected to help the energy company to prepare for future business cases that are reliant on digital solutions. However, while utilities in developed economies, including in Europe and North America, have been actively deploying smart metering, the opposite has been true for companies in Africa. The lack of funding and appetite by players in the African energy market has slowed penetration in Africa.
However, increased funding, the collaboration between stakeholders and the enactment of supporting policies is critical to accelerate the adoption of advanced meters in Africa and to create momentum.
Earlier this year, Kenya Power announced that the utility is installing some 55,000 units for small and medium enterprises as part of an $11.2 million project funded by the World Bank.
Commenting on the benefits of smart meters, Bernard Ngugi, the managing director of Kenya Power, said the system “prompt network problem identification, and audit of energy consumption will go a long way in enhancing service delivery to our customers in the SME sector”.
He added: “We believe that the advanced metering technology will further enhance customer satisfaction based on the visibility and prompt detection of power usage and also reduce technical losses which are key to ensuring reliable and quality supply of power.”
Kenya Power is currently reviewing Safaricom’s proposal internally.