Kenya Power offers poor homes flexible connection payment plan

Households that cannot pay the Sh15,000 electricity connection fee upfront will have the charge spread out in their bills for up to 25 months as the State targets more poor homes, officials have said.

Kenya Power said repayment would be staggered according to each customer’s financial ability.

“We don’t want to make the Sh15,000 payable within 60 months or five years as we had earlier proposed when the standard connection charge was Sh35,000,” managing director Ben Chumo told the Business Daily.

“We are basing our calculation (ratio) on the Sh15,000 which brings the repayment period to about 25 months.”

Last week, President Uhuru Kenyatta launched a power project that involves the use of cheaper transmission lines to cut the cost of connectivity from the Sh35,000 that applicants whose homes are located within 600 metres of a transformer used to pay.

This means customers who repay Sh15,000 in 25 months would have an extra Sh600 loaded to their monthly electricity bill.

Removing the initial cost to consumers, said Dr Chumo, should enable the company to connect all customers in the targeted areas, allowing it to enjoy economies of scale and speed up connectivity in rural areas.

READ: Kenya Power new connections charge lowered to Sh15,000

Kenya Power is expected to use a new transmission line design known as the single wire earthing return to roll out the last mile connectivity project, giving consumers cheaper access to electricity.

The government looks to double the 35 per cent of households currently connected to the grid by 2017. Households where wiring has not been done would be issued with a “ready board” which comes with sockets and bulb holders for lighting and plugging electronics.

The listed power distributor also offers Stima loan which aims to connect low-income homes that cannot raise the upfront charges. The loan attracts a one-off five per cent administration fee.

Applicants pay 20 per cent of the total loan value upfront or Sh7,000 and payment of the balance is spread out over 24 months. This means customers pay nearly Sh1,200 a month under the Stima loan facility.

Lowering the cost of connectivity comes as a relief to thousands of rural consumers who have been aspiring to connect their homes to the national grid but could not afford the more than Sh70,000 that Kenya Power demanded for homes outside the 600-metre radius of a transformer.

Under the initiative, the requirement that distinguished between customers living within and beyond the 600-metre radius of transformer is effectively removed, because the State is expected to shoulder the costs of bringing transformers closer to homes.

Kenya Power and the Rural Electrification Authority also plan to approach potential customers and offer to connect them to the national grid, unlike in the past when they waited for applications from interested clients.

Towards this end, when a resident in a certain area requests to be connected, that single application serves as a basis to install electricity in all neighbouring homes.

About 3.2 million homes are connected to the grid but Kenya Power seeks to more than double the number as it looks to create demand for an extra 5,000 megawatts expected by 2017.