Kenya Power to start connecting homes at Sh15,000

Thousands of homes will this year be connected to the electricity grid at a cut-price in what will remove darkness from many villages and trigger increased economic activity.

Kenya Power will connect homes to the national grid for Sh15,000, down from Sh35,000 previously, and will allow those connected to pay the fee over 36 months.

The electricity distributor last month signed contracts for the construction of the new power lines and installation of transformers, paving the way for rollout of the project early this year.

The utility firm is adopting a low cost connection model that will see it use single, thinner and lighter cables as well as smaller poles to lower the connection cost by more than half.

“As more citizens get connected to electricity, this should have a direct positive impact on growth and economic activity, as well as improve their welfare,” World Bank lead economist for Kenya Apurva Sanghi told the Business Daily.

Kenya Power targets to connect 314,200 homes by next year in what will increase homes with electricity to about 4.5 million, up from one million in 2010.

The increased connection comes at a moment when the country is mulling over increasing power capacity to more than 6,000 megawatts by 2017, up from the current 2,294 megawatts.

The plan dubbed Last Mile Connectivity Project was launched by President Uhuru Kenyatta in May 2015 but faced implementation delays.

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

Applicants have previously been paying Sh35,000 for homes located within 600 metres of the nearest transformer with the cost rising for those outside this radius.

Unlike the past when home owners had to make applications for connection, Kenya Power will now approach potential customers in the neighbourhood and offer to hook them to the grid.

READ: Kenya Power offers poor homes flexible connection payment plan

The first phase of the project is valued at Sh15.3 billion ($150 million) to be completed next year.

The total cost of the project stands at Sh34 billion, and will see a total of 814,000 homes hooked to the grid.

The government hopes to use the scheme to double connected homes to 70 per cent by 2017.

The low-cost connectivity brings relief to thousands of rural consumers who could not afford the Sh70,000 and above that Kenya Power demanded for homes located outside the 600 metres radius of a transformer.

Official data shows that the energy sector grew 11 per cent in the third quarter to September 2015 from 7.2 per cent in a similar period the previous year.

This was helped by increased geothermal and hydropower generation alongside increased connection of homes and schools to the national grid.