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Electricity projects
Finance and Policy  
12 December 2016

Kenya Power allocates funding for new projects

Kenya Power earmarks a budget worth $2.17 billion for the implementation of capital intensive projects in the next five years.

Last week, the national power utility explained that the funding will be used to adequately supply power to 10.8 million customers by 2021, more than double the 4.8 million clients currently connected to the national grid, the Daily Nation reported.

Kenya Power's strategic plan is said to cover five key projects, namely: infrastructure development, network modernisation, electricity loss reduction, resource realignment and improving supply and service to customers.

The power utility’s managing director, Ben Chumo, said: “Although this is a very ambitious and costly investment programme, it will go a long way in sustaining the company's growth and expansion agenda.

“The company is optimistic its profitability will increase with continued sales and demand growth. This will arise from the accelerating growth of the economy, massive infrastructural investments and a vibrant domestic private sector.”

Various sources of funding

According to the media, the power firm stated it will source the funds internally and borrow some from banks and multilateral lenders, adding that the World Bank is currently conducting a study to determine the sustainable levels of both options.

Kenya Power further stated that the study of "the company's operations and finances" will be completed by June next year and "will provide a clear definition on the levels of borrowing and the components of the borrowed moneys," media reported.

Projects in the pipeline

Some of the highlights of the strategic plan include connecting 1.2 million customers every year until 2021, which includes the 251,000 clients identified through the Last Mile project in the next two years.

It is reported that the electricity firm is targeting to install 52 new primary substations during the period, 1,000 distribution substations and about 16,000km of new power lines connecting these new customers to the national grid.

A total of 70 substations will be refurbished during the period, media reported.

Other initiatives are reported to include the expansion of the street lighting project, outsource meter reading, acquire a debt collection and management module, and install 2.8 million smart meters to better capture power consumption.

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