Rural electrification budget cut by Sh2.6bn

Some homes in rural Kenya will have to wait longer to get electricity after the budget for building transmission lines and installing transformers was cut by Sh2.6 billion.

MPs on Thursday voted for the removal of Sh1 billion from the Energy ministry budget for taking power lines and transformers to rural Kenya in a plan known as the last mile.

The lawmakers also approved a cut of Sh600 million for buying transformers for constituencies and Sh500 million for connecting schools and health centres to the grid.

“The reduction of Sh1 billion from this project could possibly result in scaling back donor funding,” said the Budget committee in reference to plans by the African Development Bank to inject Sh15 billion in the Last Mile scheme.

The government is facing a tough balancing act after a public outcry over a new 16 per cent value added tax on all petroleum products forced President Uhuru Kenyatta to suggest to Parliament to cut the levy by half.

Kenya Power #ticker:KPLC aims to speed up the number of customers it adds to the grid in the year to June, as part of its plan to improve access across the nation where only two-thirds of the population are connected.

Businesses and economists say limited distribution of power across Kenya and supplies that are often disrupted are a major obstacle to investment and prevent faster growth of the economy.

Kenya Power has earlier forecast the expansion of its grid to slow down as the number of people with access to electricity reaches saturation.

More than seven million homes and businesses are connected to the grid which represents 70 per cent of Kenya’s population of 45 million having access to electricity.