Kenya Power to light up off-grid areas using solar and wind

Kenya Power General Manager for Business Strategy Peter Mungai told the press that even as the company works to link everyone to the grid, it is inevitable that others will get connected later than others.PHOTO: COURTESY

Kenya Power has entered into strategic partnerships to use alternative energy sources to reach those not served by the national grid.

According to the State-owned firm, even with the expansion plans to connect more Kenyans to the grid, about 20 per cent of the population will have to wait longer to be served by the grid.

Kenya Power General Manager for Business Strategy Peter Mungai told the press that even as the company works to link everyone to the grid, it is inevitable that others will get connected later than others.

"For some, it will take longer and for some a shorter period. But we don't want Kenyans who are a little far from the grid to wait for so long before they can have access to clean energy," he said.

To avert cases of illegal connections and reliance on non-clean energy, Kenya Power is now betting on development partners to extend investments in wind, solar, diesel and hybrid sources to provide electricity starting next year.

Mungai said the World Bank and the French Development Agency had each committed about $150 million (Sh15.4 billion) towards the project.

International Finance Corporation is also on the radar while players such as Rural Electrification Authority and private investors are also expected to come on board to help actualise the project.

Far-flung areas like Garissa, Wajir, Mandera and Lodwar have benefited from the projects through hybrid power sources and the firm wants to extend this to all other areas currently out of grid.

"A feasibility study has been done by concerned groups and the plan is that by January next year [2017], we start rolling it out," said Eng Mungai.

The firm told investors it had signed 35 public-private agreements (PPAs), which are expected to yield 881 MW. Some 45 similar PPAs with a potential of 1300MW are also in the pipeline.

Kenya Power's current installed capacity stands at 2,341 MW even as it hopes to connect all Kenyans to the grid by 2020. The firm managed to grow its customer base by 1.25 million to hit 4.87 million in 12 months.

In the financial year ended June 30, 2016, the Nairobi Securities Exchange-listed company spent Sh50 billion on among other uses putting up a new 4,209-kilometre line and reinforcing the network. The year under review saw it carry out major investments financed from debt, causing its finance cost to rise by about Sh1.1 billion as it sunk to negative working capital.

This was thanks to full-year impact of expensive Sh19.3 billion ($190million) borrowed from Standard Chartered Bank and Equity Bank's Sh15.3 billion drove up its finance costs.

According to Kenya Power General Manager for Finance Ken Tarus, the firm had only recognised six months and nine months of the two loans respectively in the previous financial year.

In order to retire some expensive loans from its books and help restructure the balance sheet, Tarus said, the firm had to borrow money from the World Bank.