Kenya Power has secured Sh12 billion from the African Development Bank (AfDB) to finance the third phase of the Last Mile Connectivity Programme (LMCP) in which an additional 150,000 households, businesses, and public institutions would be connected to the grid.
Joseph Siror, the managing director of Kenya Power, said the Pan-African lender had agreed to provide the money that will also fund the construction and refurbishment of 13 substations and 225 kilometres of distribution lines.
The utility firm said it hooked up 746,867 households under the Last Mile Connectivity, which started in 2015 as part of the government’s push for universal electricity coverage.
Last Mile has turned out to be key in driving Kenya Power’s customer base to 9.85 million as of December last year, which is more than double the 4.8 million as of June 2016— a year into the Last Mile project.
AfDB had two years ago disclosed that Kenya Power, through the National Treasury, had applied for $150 million (Sh21.66 billion then) to fund the Last Mile project.
“The Government of Kenya has received financing from the African Development Bank towards the cost of the implementation of the sixth phase of the Last Mile Connectivity Project,” Mr Siror said yesterday.
The 150, 000 beneficiaries however exclude those in Mombasa and Nairobi. The two counties have some of the highest electricity coverage in the country. Kenya Power will use part of the AfDB cash to fund the construction of three 33/11kV (kilovolts) new substations, seven new 33kV switching stations, and the upgrading of three substations each with a capacity of 33/11kV substations.
The electricity distributor will also use part of the money to fund the laying of 211 kilometres and 14 kilometres of 33kV and 11kV distribution lines respectively and low voltage reticulations (overhead or underground lines) spanning 6,798 km.
Kenya rolled out the Last Mile Connectivity Programme in 2015, helped by financial support from AfDB, the World Bank, the Japan International Cooperation Agency, the French Development Agency, the European Union, and the European Investment Bank.
Under the programme, households close to transformers are connected to power at subsidised rates at an average of Sh15,000. Beneficiaries initially paid Sh30,000 for the job.
However, there have been concerns that a vast chunk of the customers connected under this project do not offer Kenya Power a return on investment, given the low electricity usage.
Most of the households only have bulbs and lack appliances like refrigerators, cookers, microwaves, and electric heaters,F which are key in driving power consumption.
Kenya Power is banking on increased power demand to remain on the profitability path. The firm’s net profit for the six months to December last year jumped 30 times to Sh9.97 billion.
