Kenya Power has announced its decision to maintain the Sh15,000 connection fee for households situated near transformers. This initiative falls under the third phase of Kenya Power’s subsidized program, aiming to ensure affordable electricity access for more homes across the nation.
Starting in September next year, this phase aims to connect approximately 150,000 new homes spread across 45 counties to the national grid. Notably, Nairobi and Mombasa are not included in this program.
This fee was initially set at Sh35,000 when the project was launched in 2015. However, in 2019, it was reduced to Sh15,000, a move that significantly reduced the financial barrier for households seeking access to electricity.
This crucial initiative, funded jointly by the Treasury and other financial backers, was initiated in 2015 to provide electricity to homes near transformers at more affordable rates, contributing to the goal of universal electricity coverage.
Kenya Power responded to Business Daily, confirming that customers will continue to pay Sh15,000 in the third phase of the Last Mile Connectivity program. Currently, Kenya Power is in the early stages of procuring materials and contractors for the project, which was initially set to begin before the end of this year.
The primary financiers of this initiative include the African Development Bank (AfDB), the French Development Agency (AFD), the European Union (EU), and the European Investment Bank (EIB). Kenya is seeking Sh21.66 billion ($150 million) from the AfDB, in addition to the Sh13.38 billion (€90 million) loan from AFD, a Sh4.46 billion (€30 million) grant from the EU, and another loan from the European Investment Bank (EIB) amounting to Sh8.92 billion (€60 million).
As of June last year, Kenya Power had successfully connected around 741,185 customers to the grid since the project’s inception in 2015. The third phase signifies the culmination of an eight-year-long effort aimed at electrifying homes within 600 meters of a transformer.
This program, known as the Last Mile Connectivity initiative, has been instrumental in expanding electricity coverage in Kenya, from 2.3 million connections in 2013 to slightly over nine million by the end of last year.
While questions have been raised about the economic returns of the expanded grid, which was initially seen as a key factor in boosting Kenya Power’s electricity sales, this initiative remains essential in achieving widespread access to electricity for Kenyan households.
Kenya Power’s commitment to affordable household electricity access and its ongoing efforts to extend the reach of the national grid align with the nation’s electrification objectives.
Photo source: kenyanwallstreet
By: Montel Kamau
Serrari Financial Analyst
20th September, 2023
