Kenya is set to tackle its electricity losses, currently standing at a staggering 24% from generation to the end consumer, through a multi-pronged approach spearheaded by the government.
- •The initiatives, aimed at curbing both commercial and technical loopholes, include the introduction of bulk metering for households in high-population areas.
- •They also include a review of power purchase agreements with Independent Power Producers (IPPs), and the revival of private sector deals for upgrading high-voltage transmission lines.
- •The pervasive issue of illegal power connections costs Kenya Power billions annually, impacting the utility’s earnings and contributing to high power prices for consumers.
“Going forward, the population in these areas shall identify an individual or entity that will be the contact person with the Kenya Power. Our utility firm will then bill that individual who will in turn supply power to households in those areas,” Energy and Petroleum Cabinet Secretary Opiyo Wandayi explained this week.
“The plan we are trying to implement has worked elsewhere and helped curb revenue loses, promote safety and ensure uninterrupted power supply to those areas by reducing matters of disconnection,” he added.
The government is also moving to review existing power purchase agreements with IPPs, a “legacy problem” identified by CS Wandayi as a major driver of elevated electricity costs. “We are going to review terms of these power purchase agreements with the IPPs; going forward, we shall enter into flexible PPAs which are sensitive to the public needs,” he said.
He further revealed that the government is in advanced stages of establishing Public-Private Partnerships (PPPs) for the construction of high-voltage transmission lines across the country. This comes after the previous Adani deal with Ketraco, which aimed to finance, construct, and operate transmission lines and substations, fell through.
“…the demand is there, the population is increasing, investors are really looking upon us, Kenyans are demanding to have power for 365 days for every second. So, it’s just a matter of balancing that. That’s why we are thinking of PPPs and asset monetization,” according to KETRACO, which is currently grappling with annual new projects requiring over $250 million and the government nearing its debt ceiling.
Wandayi has revealed that a contract signing with Africa 50 is imminent, which will see the development of the Lessos-Losuk and Kibos-Kakamega-Musaga lines, mirroring the scope of the canceled Adani deal but with “robust public engagements.”
