Economy

Counties win 64pc tariff cut on power in street lighting project

LIGHTS

A worker fixes street lights in Mombasa. Kenya Power has pushed its targeted completion date of the lighting project to June. PHOTO | FILE

Counties have won a major concession in the ongoing nationwide street lighting project following a 64 per cent tariff cut to boost security and support a 24-hour economy.

The 47 counties have been granted a special tariff set at Sh4 per kilowatt hour (kWh) instead of Sh11 to ease the burden on consumption bills and encourage adequate lighting in all major towns and townships.

“The decision was made to save the counties from the burden of high power bills. This fits the objective of the project to improve security and support economic activity,” Ben Chumo, the Kenya Power chief executive, said.

Kenya Power is expected to partly absorb the effects of the drastic tariff cut through projected increased sale of cheaper units under the slashed pricing deal.

“We look up to selling more units of power under this arrangement and benefit from the numbers. We have also asked the regulator to consider the deep tariff cuts so that we are not stranded with some of our cost obligations as an off-taker,” Dr Chumo told the Business Daily.

Mombasa and Nairobi are among the towns that have already benefited from the initial phases of the street lighting project, dubbed Mwangaza Mtaani, which has seen Kenya Power install more than 12,000 Light Emitting Diode (LED) lamps across the country. In Nairobi an estimated 4,200 street lights have been installed.

Dr Chumo said the government had released Sh7.6 billion to finance the installation of street lighting in 52 key towns and townships countrywide. “The project is fully funded by the government. The first phase is projected to end by February 2, 2017,” Dr Chumo said.

Kenya Power recently invited local manufacturers to supply 58,951 concrete poles as it stepped up the street lighting programme.

Besides the street lighting project, the government is implementing a programme to connect thousands of homes to the national electricity grid at cut price.

Under an initiative dubbed Last Mile Connectivity project, Kenya Power will light up homes for Sh15,000, down from Sh35,000, and will allow those connected to pay the fee over 36 months.

The Last Mile Connectivity project was launched by President Uhuru Kenyatta in May 2015 but has faced implementation delays.

Under the scheme, Kenya Power will install additional transformers and power lines closer to unconnected homes through a cheaper technology known as single wire earthing return.

The Sh15,000 fee is set to remove a major hurdle to the acceleration of rural electrification and spur village economies as residents open up businesses like welding, barber shops, hotels and cyber cafès.