advertisement

Economy

Kenya Power reveals Sh3.3bn subsidy for cheap connections

Elizabeth Keter Cherotich at her house in Nandi, which was connected to electricity under the Last Mile Connectivity Project in October last year. PHOTO | Jared Nyataya | NMG
Elizabeth Keter Cherotich at her house in Nandi, which was connected to electricity under the Last Mile Connectivity Project in October last year. PHOTO | Jared Nyataya | NMG 

The Treasury offered Sh3.3 billion to electricity distributor Kenya Power #ticker:KPLC in the year ended June to cut charges for connecting homes to the national grid under a programme meant to speed up electrification.

Cheap power connection under the Last Mile Connectivity Project has been a key plank of the Jubilee government’s energy policy.

Out of the Sh3.3 billion cash subsidy due to Kenya Power, the government only released three quarters or Sh2.46 billion in the year to June 30, which was pumped into financing new connections.

The Treasury had not released the remaining Sh840 million at the end of the financial year, according to Kenya Power’s financial statements.

The Last Mile Connectivity Project has seen power consumers get connected at a subsidised rate of Sh15,000 depending on their proximity to power lines and transformers, down from Sh35,000 since last year. Beneficiaries are strictly homes located within 600 metres of a transformer.

“The Sh3.3 billion receivable from the government is part of a larger commitment by the government to be financed partly through support from the World Bank and the African Development Bank to enhance universal access to electricity,” the utility firm says in its report.

The Nairobi Securities Exchange-listed firm allows those connected to the national power grid to pay the fee over 36 months, removing the cost hurdles for poor homes.

Officials have been racing to increase access to power to support economic expansion.

The power connectivity drive involves installing transformers and low-voltage lines to reach homes in remote villages.

Kenya Power’s customer base has grown from one million in 2010 to 6.3 million, with the power connectivity access rate rising to 70 per cent. But the company’s  sales have not grown by a similar margin because the connections are driven by low electricity consumers.

Under the last mile project, Kenya Power approaches potential customers and offers to connect them to the national grid in clusters, unlike in the past when homeowners had to apply for a connection.

advertisement