The government has shelved a Sh14.6 billion project that aimed to connect public institutions and offices to the national power grid following the withdrawal of the Finance Bill, 2024 which has left a big hole in the State’s budget.
The Treasury has cut the State Department for Energy’s budget for the 2024/25 fiscal year by Sh18.5 billion down to Sh14 billion from the Sh32.5 billion that the exchequer had initially allocated last month.
The Treasury had set aside Sh14.6 billion to light up public facilities such as schools, hospitals, trading centers, and national government administration offices in the June budget, but the allocation has been fully withdrawn in the revised spending plan.
The plan to connect more rural households to electricity has also been hit after its entire budget of Sh1.2 billion was withdrawn as part of President William Ruto’s revised spending plan that has reduced the budget for the FY2024/25 by Sh177 billion.
President Ruto also announced additional borrowing of Sh169 billion over the financial year in the delicate balancing act of plugging the gap of Sh346 billion that the State had anticipated to collect from the additional tax measures in the Bill.
The budget cut has affected most key projects within the energy sector, including the development of alternative energy technologies, upgrading the country’s rapidly expanding distribution network, and constructing new power transmission lines.
For instance, the Sh373 million budget for the Sondu – Homabay – Ndhiwa - Awendo Electrification Project has been withdrawn as well as the Sh381 million allocation to the Olkaria – Lessos - Kisumu Power Lines Construction Project.
Other key projects that have incurred budget cuts are the completion of the Turkwell- Ortum- Kitale line (Sh109 million), the Power Transmission System Improvement project (Sh450 million), street lighting (Sh211 million), Last Mile Connectivity Project (Sh300 million) and the Eastern Electricity Highway Project (Ethiopia- Kenya Interconnector) (Sh165 million).
The withdrawal of the budget is set to further delay the projects and hurt the would-be beneficiaries.
The construction of the 220kV Turkwel-Ortum-Kitale transmission line, for instance, was to be completed in August 2015 but has been delayed for years, denying consumers cheaper power from the Turkwel hydropower station.
The funding cut to the Power Transmission System Improvement project also means that the constraints of the existing transmission network will remain for a little longer, exposing consumers in areas where the network is constrained to continued power outages.
