Kenya Power draws Sh219bn budget for mega projects in 5 years

Electricity distributor Kenya Power has prepared a $2.17 billion (Sh219.1 billion) budget for the implementation of capital intensive projects in the next five years.

The utility firm, in its blueprint, states that the funds will be used to adequately supply power to 10.8 million customers by 2021, more than double the 4.8 million clients currently connected to the national grid.

Kenya Power’s plan covers five key projects — infrastructure development, network modernisation, electricity loss reduction, resource realignment and improving supply and service to customers.

“Although this is a very ambitious and costly investment programme, it will go a long way in sustaining the company’s growth and expansion agenda,” Kenya Power managing director Ben Chumo notes in the strategy document.

“The company is optimistic its profitability will increase with continued sales and demand growth. This will arise from the accelerating growth of the economy, massive infrastructural investments and a vibrant domestic private sector.”

The power firm says it will source the funds internally and borrow some from banks and multilateral lenders, adding that the World Bank is currently conducting a study to ascertain the sustainable levels of both options.

Kenya Power says the study of “the company’s operations and finances” will be completed by June next year and “will provide a clear definition on the levels of borrowing and the components of the borrowed moneys.”

Some of the highlights of the strategic plan include connecting 1.2 million customers every year until 2021, including 251,000 of them through the Last Mile project in the next two years.

The Nairobi bourse-listed firm expects to install 52 new primary substations in the period, 1,000 distribution substations and about 16,000 kilometres of new power lines connecting them to the grid.

A total of 70 substations will be refurbished during the period. Other initiatives include expanding the street lighting project, outsource meter reading, acquire a debt collection and management module, and install 2.8 million smart meters to better capture power consumption.

The utility firm plans to procure 2,725 megawatts power from 44 new power stations, with coal being one of the main new sources of energy.

It also plans expand its slum electrification, lay underground cables in satellite towns as well as set up self-service kiosks as a substitute to banking halls.