Economy

State retains Sh15,000 cheap electricity connection fee for households

Wednesday September 20 2023

Kenya Power employees replace a transformer on Moi Avenue in Mombasa. FILE PHOTO | NMG

Households near transformers will continue to pay Sh15,000 for connection to the national grid under the third phase of a subsidised programme, Kenya Power says.

The utility firm disclosed that the new phase of the project will start in September next year as it targets to add about 150,000 new homes in 45 counties to the national grid.

Read: Galana Kulalu set for Sh1.1bn electricity connection

Nairobi and Mombasa are excluded from the programme. Customers paid Sh35,000 in connection fees at the start of the project in 2015 but this halved to Sh15,000 in 2019, easing the financial hurdles for homes seeking to light up homes.

The project jointly funded by Treasury and other financiers was launched in 2015 in a scheme to link homes near transformers to electricity at cheaper rates in the race to ensure universal electricity coverage.

“Customers will continue to pay Sh15,000 in the third phase of the Last Mile Connectivity,” Kenya Power said in a response to Business Daily.

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The utility is in the early stages of procuring materials and contractors to undertake the project that was initially set to start before the end of this year.

Key financiers of the initiative include the African Development Bank (AfDB), the French Development Agency (AFD), the European Union (EU) and the European Investment Bank (EIB).

Kenya is seeking some Sh21.66 billion ($150 million) from the AfDB to add on to the Sh13.38 billion (€90 million) loan from AFD, a grant of Sh4.46billion (€30 million) from the EU, and another loan from the European Investment Bank (EIB) of Sh8.92 billion (€60 million).

Some 741,185 customers had been connected to the grid under the project by the end of June last year since the start of the project in 2015, according to disclosures by Kenya Power.

The third phase marks the end of the project that was started eight years ago as part of Kenya’s goal of lighting up homes. Beneficiaries must be located within 600 metres of a transformer.

Read: 680000 Kenyan homes illegally connected to power

The Last Mile Connectivity program has helped Kenya raise electricity coverage from 2.3 million connections in 2013 to slightly above nine million at the end of last year.

There are however questions over the economic returns of the expanded grid that was at the start seen as key to lifting Kenya Power’s electricity sales.

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