Delay in funds release slows power link-ups
Ministry of Energy and Petroleum cabinet Secretary Davis Chirchir address participants at Villa Rosa Kempinski in Nairobi on October 1,2014, during the launch of Power Demand Study. Chirchir told the Nation by telephone, on October 21, 2014, that an agreement on the credit meant to subsidise connection to homes is expected to be signed in November. FILE PHOTO | EVANS HABIL | NATION MEDIA GROUP
What you need to know:
- In May, the Energy ministry said the money would be received in September, hoping that the bank’s board approved the loan during its meeting scheduled during that month.
- Kenya is seeking $150 million from AfDB as part of a total $800 million (Sh13 billion) budget to be spent on the “last mile connectivity” project, which will see Kenya Power enhance electricity distribution infrastructure.
A project by the government meant to ease the cost of new power connections has suffered a blow after the African Development Bank (AfDB) delayed release of the first batch of funds towards the initiative.
Energy and Petroleum Cabinet Secretary Davis Chirchir told the Nation by telephone, on Tuesday, that an agreement on the credit meant to subsidise connection to homes is expected to be signed in November.
In May, the Energy ministry said the money would be received in September, hoping that the bank’s board approved the loan during its meeting scheduled during that month.
“We are hoping to sign an agreement in November once the board has approved the government’s request. We have received a lot of interest from other lenders as well,” Mr Chirchir said.
Kenya is seeking $150 million from AfDB as part of a total $800 million (Sh13 billion) budget to be spent on the “last mile connectivity” project, which will see Kenya Power enhance electricity distribution infrastructure.
New domestic customers will be connected at the current cost of Sh35,000. No clear reasons were provided on why AfDB has taken longer.
NEW CONNECTIONS
However, a source at the AfDB’s office in Nairobi told the Nation that negotiations on the loan are ongoing with a meeting to be held Thursday.
Should a deal be reached after the meeting, the request will proceed to the board for approval.
Other lenders said to have shown interest in funding the project include the World Bank and the French Agency for Development. It will take five years to absorb the entire loan.
An average of 500,000 new customers per year are targeted under the project. This is expected to increase the rate of electricity access from the current 32 per cent to 75 per cent in the next five years.
Results of a study commissioned by the Energy Regulatory Commission to establish the actual fees that consumers should pay for new electricity connections, which were due for release in November last year, are yet to be made public.
