The Ministry of Energy has clashed with the partially private Kenya Power #ticker:KPLC over the nationwide rollout of a subsidised rural electricity connection.
While the power distributing monopoly has questioned the business sense of a project marked by low demand and high rate of default on connectivity loans, the Energy ministry says it adequately compensates for the losses.
“The government disburses funding to Kenya Power for implementation of these projects. Any additional operational and maintenance costs incurred by Kenya Power in these projects are reimbursed by the government,” Energy Secretary Charles Keter told the Business Daily.
The ministry has — through its five-year plan — been connecting rural households in a project that seeks cover 1.02 million customers. Up to 48 percent of targeted households have since been connected.
Last week, Kenya Power managing director Bernard Ngugi said some of the rural customers were struggling to repay the Sh15,000 connection debt meant to be recovered from their monthly consumption.
Some of the Kenya Power lines remain idle in the rural areas, pushing the utility firm further into debt and financial woes as recently revealed by the 2020 Economic Survey.
“The number of customers connected under the rural electrification programme expanded by 5.8 percent to 1,409,256 in 2018/19 from 1,332,209 in the 2017/18, mainly drawn from domestic and small commercial categories. However, revenue realised declined by 9.1 per cent from Sh11.84 billion in 2017/18 to Sh10.77 billion in 2018/19,” the KNBS wrote in April.
The report essentially shows that Kenya Power connected 77,047 more customers in rural areas during the year but collected Sh1.07 billion less.
Some rural and urban poor who are unable to meet the power costs resort to illegal connections that bypass the meters whenever they are disconnected for failing to purchase top-ups —increasing non-technical losses for Kenya Power.