Kenya Power gets Sh10bn deal to light Nairobi streets

Kenya Power has signed a Sh10 billion contract with the government to install street lights on Nairobi’s major commercial and residential areas, a big boost to the electricity distributor’s top line.

The power firm has already received a first tranche of Sh381.2 million from the Treasury to kick-start the lighting project that is part of the government’s efforts to turn the city into a 24-hour economy.

The Central Business District (CBD) and Westlands as well as residential areas of Eastleigh, Kahawa West, Buru Buru and Embakasi will see their streets lit up.

Industrial areas set to benefit from the plan include Baba Dogo, Kariobangi Light Industries, and Industrial Area while informal sector zones of Kamukunji and Gikomba will also be lit up.

“We are currently mapping areas where there are street lights on Kenya Power infrastructure in conjunction with the county government for the initial rehabilitation,” Ben Chumo, the Kenya Power managing director told the Business Daily.

Nairobi, which is home to about four million people, has approximately 24,000 street lights and 7,300 public lighting masts covering 30 per cent of the city, according to Kenya Power.

However, 40 cent of these street lights (or 9,600 of them) are currently not working and the power firm has costed their refurbishment expenditure at Sh953 million.

“The government’s goal is to facilitate provision of sustainable, efficient and effective public lighting in all counties and Nairobi was selected first as it is the seat of government and contributes 55 per cent of GDP,” said Mr Chumo.

A further Sh9.84 billion is to be spent on installing 12,959 new public lighting masts and 54,029 street lights.

Deliberations about lighting up Nairobi streets in order to convert the city into a 24-hour economy have been ongoing for more than a decade, but little has been achieved so far.

“Business transactions and productive activities are currently restricted to daytime operations due to perceptions and experiences of insecurity associated with poor night-time visibility,” said Mr Chumo.

Even where street lights have been installed, vandals promptly switch them off, plunging roads, commercial and residential areas into darkness.

Some vandals divert power from security masts and distributing it to houses, charging users a monthly fee while others pluck the copper wires at the control systems for sale.

READ: Rising insecurity hampers rollout of 24-hour economy

The vandalism has left highways such as Thika Road, Waiyaki Way and Kiambu Road among many others in darkness.

“Good lighting directly deters criminal activities by increasing the sense of personal safety as well as protection of property,” said Kenya Power in a statement.

However, inaction by the government has remained the biggest reason that nothing much has been done.

The Controller of Budget’s report for the year to June showed that Nairobi spent Sh1.8 billion on street lighting, roads and purchase of garbage trucks against a budget of Sh7.6 billion.

This use of 25 per cent of the project budget reflected an underwhelming expenditure which Agnes Odhiambo, the Controller of Budget, attributed to challenges in planning and the procurement process. Nairobi is not the only county that is set to get lit up in the coming months.

Machakos, Mombasa, Siaya and Embu are some of the devolved units that are also spearheading similar initiatives.

Siaya in April signed a deal with Philips East African Company that will light up Ugunja town and its environs with solar-powered street lights at a total cost of Sh59.2 million.

Machakos in June spent Sh14 million in a street lighting project covering a total of 33 kilometres while Mombasa is installing solar street lights in several parts of the city.

The push to light up Nairobi is significant since it accounts for over half of the country’s gross domestic product, and any positives that arise from this project could shore up this contribution.

Nairobi also accounts for almost half of Kenya Power’s customer base with about 1.04 million clients connected to the power grid as of June 2013.

This accounts for 44.7 per cent of the entire 2.33 million customers that the electricity firm distributes power to, a further pointer to the economic importance of Nairobi.

In the financial year to June 2013, Nairobi lead other regions in terms of Kenya Power sales from street lights.

The region recorded sales of 15 gigawatt hours (GWh) followed by Coast with 5 GWh, Mount Kenya region had sales of 2 GWh while Western was last with street lighting generating sales of 1 GWh.

A kilowatt hour is equivalent to a steady power of one kilowatt running for one hour and a GWh is equivalent to one million of these units.