Electricity producer blames outages on Ketraco’s ‘old, faulty’ power lines

There is enough power in the national grid to light households and industries in Kenya; the problem is old transmission lines that can barely deliver it.

The sentiment was expressed by Kenya Electricity Generating Company (KenGen) Managing Director Albert Mugo.

“The Government told us to increase our power capacity because of the demand. Five months ago, we pumped in an additional 360 megawatts (MW). Soon, we will pump in another 370 MW. But as long as old, faulty power lines exist, power outages will remain.

“It’s time the Kenya Electricity Transmission Company (Ketraco) worked on those lines. Some of them are older than most of us,” Mugo said to the bemusement of the audience during the company’s public forum that was held at the Inter-Continental Hotel on Friday. The event was hosted by investment analyst Aly Khan Sachu.

Someone at the event had wanted to know why Nairobi suffered a major blackout three days ago. Mr Mugo said the company currently produces 2,000MW and will ramp up this to 5,219 MW by 2020.

It is appalling to note that Ethiopia, a country currently experiencing rapid economic growth and stability, will be producing 10,000MW by 2020, double Kenya’s output. This means with more energy to power its economy, it will attract more investors, and given its favourable demographics, could soon surpass Kenya as a regional economic powerhouse.

KenGen’s rapid growth in profitability over the years was lauded, but its weak stock trading at Nairobi Securities Exchange was noted as an Achilles heel by shareholders who failed to understand the logic. The company grew its after-tax profit by 308 per cent from Sh2.8 billion in 2014 to Sh11.5 billion last year.

But its stock has lost value, currently trading at Sh5, from a year high of Sh13.

“I am an engineer and not a financial analyst. I also cannot explain the workings at the NSE about our share price,” Mugo said when pressed to explain the sharp drop in share price.

The company plans to drive the government’s development agenda by providing energy through building more plants at Olkaria. The new Olkaria V plant was largely hailed for its sensitivity to the community that lived on the grounds it was built.

“We bought 1,700 acres of land at a cost of Sh1.5 billion, on which we settled the people who lived on the grounds where Olkaria V was built. We built each individual a two bedroom house and a school for their children,” said Mugo.

Kenya, which signed a deal to reduce its carbon emissions by 30 per cent, during the 2015 United Nations Climate Change Conference in Paris, will seek to achieve this by engaging companies like KenGen which has promised to source for new green energy prospects.

Mr Sachu blamed the Government for the current petrol prices that are not in tandem with global prices, saying: “The Government is in a weak fiscal position currently and so, taxes oil companies highly. It is making between Sh100 million and Sh150 million monthly from oil.”