Economy

Kenya fails to connect 1.28m to power grid

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A Kenya Power technician fixing a transformer. FILE PHOTO | NMG

Kenya missed to connect nearly 1.28 million homes and businesses to electricity in the three years through June 2020, largely blamed on budget cuts, shortage of poles and sluggish tax exemption approval.

The Energy Ministry says Kenya Power and Rural Electrification and Renewable Energy Corporation (Rerec) connected 1,522,858 customers to the national grid in the three-year period, a 45.61 percent shortfall over the 2.8 million goal.

The agencies, mandated to distribute power, connected 581,639 out of 1.2 million customers targeted in the year ended June 2018 and 440,822 out of 800,000 clients they had set out to connect in the year that followed.

Additional 500,397 customers were hooked to the electricity mains in the year ended June 2020, the data shows, but fell short of the 800,000 target by 37.45 percent or 299,603 clients.

“Underachievement was due to budget cuts, delays in processing tax exemptions and clearance of materials at the port (of Mombasa), government ban on logging, litigations, Covid-19 containment measures, among others,” the ministry says in a progress report published by the Treasury.

The development budget for the State Department of Energy for fiscal year ending June 2020 was cut by nearly Sh6.3 billion to Sh19.6 billion, according to gazetted expenditure statistics by Treasury secretary Ukur Yatani, but some Sh1.03 billion was not absorbed.

Kenyan law exempts projects funded by donors from taxation by the Kenya Revenue Authority (KRA), while the ban on logging to increase afforestation levels has been in place since February 2018.

For instance, the Last Mile Connectivity project, a subsidised power connection initiative geared at hooking homes to the electricity mains in phases based on proximity to transformers, is funded by the World Bank, the African Development Bank (AfDB) and the Kenyan government.

The project’s cost is estimated at Sh77.6 billion over eight and a half years, with the development financiers committing Sh50 billion while the remainder is being provided by the government.

The Energy ministry data further shows Rerec connected 678 public facilities such as schools, health centres and markets in the three-year period through June 2020, falling short of the 1,002 target attributed to “non-availability of wooden poles”.

This was after rural electrification agency hugely underperformed its goal of installing 1,573 transformers after only 456 were hoisted.