Homes seeking electricity connection will have to wait longer for installation of additional transformers and power lines to enjoy the subsidised Sh15,000 connection fee.
Energy Secretary Charles Keter says the bulk of homes without power will qualify for the subsidy once the new Sh3 billion transformers have been installed. The Treasury has allocated the amount in the national budget for the fiscal year starting July.
Customers who opt not to wait for the planned line and transformers will be forced to pay at market rate, a fee that would allow Kenya Power to recover the full connection cost.
Kenya Power has, since mid-last year, been connecting homes to the grid for Sh15,000, down from Sh35,000 and allows the customers to pay the fee over 36 months, removing the cost hurdles for poor homes.
“It is Sh15,000 per customer within 600-metre radius of a transformer. Those beyond pay at cost,” said Mr Keter in an interview.
“We’re putting up more transformers to bring equity in terms of coverage. The Sh3 billion in the budget is to bring more unconnected homes closer to a transformer.”
Some applicants in rural Kenya have been paying in excess of Sh100,000 to be connected to the power grid despite being near a transformer.
This is a departure from earlier promise by State officials that homes would be connected at Sh15,000.
Kenya Power currently has 55,000 transformers and needs additional units to spread its distribution network to off-grid areas.
The cost of a transformer ranges between Sh200,000 and Sh500,000, according to the utility firm.
This means the Sh3 billion can buy up to 15,000 new units or nearly a third of the current population.
Chinese firm Yocean Group last year opened Kenya’s first transformer manufacturing plant, eyeing big-ticket supply contracts from the electricity distributor.
Treasury budget estimates for the 2017/18 year show that a further Sh9.7 billion will be spent on the last mile connectivity project.
The low-cost project has been a key plank of the Jubilee government’s energy policy in expanding power access.
The number of customers connected to the power grid has increased to 5.8 million from one million in 2010, a nearly six-fold growth.
Before the last mile project, homes located within 600 metres of a transformer paid Sh35,000 as connection fee, which Kenya Power reckoned was still below markets rates.
The electricity retailer last year put the real cost of a single-phase connection near a transformer at Sh100,000, meaning the government shouldered the difference.
The government reckons that the last mile project will remove a major hurdle to acceleration of rural electrification and spur village economies as residents open up such businesses like welding, barber shops, hotels and cyber cafés.
President Uhuru Kenyatta launched the project in May 2015, but it faced implementation delays before taking off last year.
Kenya has set 2020 as the deadline to attain universal power access.
Unlike in the past when home owners had to make applications for connection, Kenya Power is now approaching potential customers in neighbourhoods with transformers and offering to hook them to the grid.
The last mile project is financed to the tune of Sh43.5 billion by the African Development Bank and the World Bank.