Ketraco: Expensive land acquisitions slow down electrification

Kenya Electricity Transmission Limited (Ketraco) CEO Fernandes Barasa. 

Like most of sub-Saharan African countries, Kenya’s electrification is currently lagging behind global averages. More than half of its population is outside the national power grid. At the same time, Kenya’s installed electricity capacity has risen from 1,800MW in 2013 to 2,333MW last year. 

This is, however, behind the Government’s planned schedule of building 5,000MW of installed capacity by 2017. Business Beat sat down with the Kenya Electricity Transmission Limited (Ketraco) CEO Fernandes Barasa to discuss the developments in the country’s power sector, the planned projects and road-map to close the country’s electricity supply gap.

More than half of the country’s households do not have access to electricity yet the country produces more than enough power. What is the role of Ketraco in bridging this supply and demand gap?

We have more than 2300MW of installed capacity at the moment and the demand in the country is 1,700MW indicating that demand is not matching supply. There is a need to put in place programmes to accelerate demand and we are working to help implement some of them. This includes for example the creation of special economic hubs like the Konza Technopolis which we believe will build demand to help absorb some of the extra supply.

In addition to this, we hope that the growth of other sectors like tourism and infrastructure will generate additional demand. The Standard Gauge Railway (SGR) for example can create about 200MW of electricity demand if it is electrified. We believe that part of our mandate is to make Kenya an investment hub since this cannot happen without reliable and stable power.

And how exactly are you executing this mandate?

Currently, the country is implementing several high priority projects totalling about 5,000km of transmission lines and regional power interconnections of different voltage levels that we all expect to complete by 2020. About 18 projects are under implementation including lines and these include; 430km 400kV Loiyangalani-Suswa, 300km, 400/220kV Olkaria-Lessos-Kisumu double circuit line and substations and the 612km 500kV Ethiopia-Kenya interconnection line and substation.

How much are these projects estimated to cost and how is Ketraco planning to raise the funds?

The projects require about $2.5 billion (Sh250 billion) and the projects are all in line with Vision 2030 second medium term plan. The task we have as Ketraco is to have developed 11,230km of new high voltage transmission lines at an estimated present value cost of $3.55 billion (Sh355 billion) by the year 2030.

We can’t rely on Treasury alone to raise this and we are working with development partners like the African Development Bank (AfDB) and bilateral partners like Japan through the Japan International Corporation Agency (JICA).

What are some of the challenges slowing down the process of electrification?

Land acquisition and compensation is the biggest challenge. There are several places across the country where the community owns the land and this makes the acquisition process complicated. Sometimes the owners can stop the line by making outrageous demands for compensation sometimes up to ten times the value of the land we want to acquire.

You can imagine the cost implications in cases where the line transverses up to five counties. We are working with counties as part of our stakeholder engagement programme where we use opinion leaders and elders in the community who help us in the identification and verification process in areas where land is communally owned.

The National Land Commission has also come in handy and helps us in expediting right of way requests in some of the projects. Vandalism is also another challenge. Our power lines are prime targets for vandals and we believe a lot of the material ends up being sold in scrap metal shops. We constantly have to monitor the line and this alongside replacement of vandalised lines is another challenge.