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Only President Barack Obama’s signature stands between Sh4.4tr in power projects and 600m people in darkness

FINANCIAL STANDARD
By Patrick Alushula | February 9th 2016

More than 600 million people in sub-Saharan Africa are just a signature away from getting access to reliable electricity.

This follows the decision by United States’ House of Representatives last week to pass the Electrify Africa Act, after nearly two years of failed attempts to do so.

Their decision, which mirrored that of the Senate last December, means the legislation now goes to President Barack Obama for his signature.

The act requires American presidents to establish multi-year strategies to help countries in sub-Saharan Africa implement national energy solutions, including renewable power.

It also provides a framework for private firms to invest in promoting energy solutions in Africa, which frees up US taxpayers’ dollars.

Mr Obama is a strong supporter of the legislation, which means the chances of ‘white smoke’ coming from the White House on the law are as close to guaranteed as possible.

Doubling access

House of Representatives Foreign Affairs Committee Chairman Ed Royce, who has been instrumental in pushing for the legislation in both chambers of the US congress, applauded the decision.

“It is a direct response to the fact that today, 600 million people living in sub-Saharan Africa — that is 70 per cent of the population — do not have access to reliable electricity,” he said.

In June 2013, Obama launched the Power Africa initiative, a partnership involving the US government, African governments, development partners and the private sector, to light up sub-Saharan Africa.

The initiative is a combined effort of more than 120 public and private sector partners, and is expected to add 30,000 megawatts (MW) and 60 million connections in the region by 2030.

It started out with a $7 billion (Sh715.3 billion at current exchange rates) commitment from the US government, which has since attracted pledges from public and private sector partners, growing the initiative’s fund to $43 billion (Sh4.4 trillion).

Barely two weeks ago, the Obama administration launched the road map for Power Africa, which outlines the strategy for doubling electricity access in sub-Saharan Africa.

Access to proper lighting and reliable, safe power is considered a development multiplier that could significantly eliminate poverty by encouraging businesses to grow.

According to the latest Poor People’s Energy Outlook report published by Practical Action NGO, 30 per cent of health facilities in sub-Saharan Africa — which serve an estimated 255 million people — do not have electricity.

The report estimated that 25 per cent of facilities in Kenya had no reliable energy supply, and blackouts happened at least six times a month, for an average of 4.5 hours at a time.

This “directly affects services such as childbirth and emergency treatment, and limits night-time services. It can also lead to wasted vaccines, blood and medicines, which require constant storage temperatures. Backup generators can be extremely expensive”, it added.

Further, of sub-Saharan Africa’s 49 countries, only eight (Botswana, Comoros, Equatorial Guinea, Gabon, Ghana, Mauritius, Seychelles and South Africa) have an access rate of over 60 per cent.

This is according to the International Energy Outlook, which puts Kenya’s accessibility at more than 30 per cent but below 60 per cent.

Kenya’s ambition

However, Kenya has been on an ambitious plan to connect as many people as possible to the national grid and lower costs of power since former President Mwai Kibaki launched the Rural Electrification Programme in his first term.

President Uhuru Kenyatta has carried on with the agenda, lowering connection fees from Sh35,000 to Sh15,000 in May last year, with the anticipation being that 70 per cent of the country will be connected to the grid by 2017.

“This single factor will effectively transform the lives of over 2.3 million Kenyans throughout the 47 counties, while at the same time catalysing economic development in all sectors,” he said.

Poor Kenyans who still cannot afford the reduced cost, the President added, would be allowed to pay in instalments through their monthly electricity bills.

Last month, Kenya Power signed a Sh12.2 billion partnership with the World Bank and African Development Bank that will see Kenyans living in informal settlements get connections at Sh1,160.

Further, in October 2014, the country launched the Sh11.5 billion Olkaria Geothermal project, which saw the World Bank rank Kenya the eighth-largest producer of geothermal energy in the world in its 2015 report. This put it ahead of giant economies like Japan, Russia, China and Germany.

The project injected 280 MW to the national grid.

And by the end of that year, the Kenya Electricity Generating Company (KenGen) announced cheaper geothermal power accounted for 51 per cent of installed power capacity, displacing hydropower as the top energy source.

Too much power?

Currently, the country’s capacity stands at 1,611 MW against demand of 1,530 MW.

And last week, KenGen CEO Albert Mugo announced plans to invest in reserve energy from green sources in anticipation of high demand from the industrial sector.

However, there have been fears that this expansion may result in unutilised capacity, but KenGen said it is focused on driving demand by ensuring adequate and reliable power supply.

To spur industrial uptake, it intends to set up an industrial park within Olkaria, and is betting on ongoing development projects, such as the standard gauge railway, increasing consumption on completion.

At its Ngong farm, KenGen plans to increase capacity from 25.5 MW before setting up another wind farm in Meru County.

Kenya Power and the Kenya Electricity Transmission Company (Ketraco) have both promised to translate this increased power supply into stable connections.

Kenya Power has been replacing faulty transformers to address outages and hopes to complete this by tomorrow. It has also set aside Sh10 billion to enhance maintenance of existing distribution infrastructure, including introducing multiple lines.

“We want to have spare capacity so that for every single line, we have two more lines heading to that destination, so that if one fails, our system automatically switches to another line to continue giving customers [uninterrupted] supply,” Kenya Power Managing Director Ben Chumo said.

And at a media briefing held last week, Ketraco, which is in charge of transmission lines, also expressed optimism that the 100-kilometre Suswa-Isinya power transmission line, which is critical to evacuating 1,500 MW from Ol Karia and Mombasa, would be completed soon. It is also from the Isinya sub-station that Ketraco plans to expand to Tanzania and evacuate power from Ethiopia.

In World Bank’s 2015 economic analysis for Kenya, Anchoring High Growth: Can Manufacturing Contribute More?, the projected 6.6 per cent growth in 2016 and 7 per cent in 2017 is pegged on continuous growth in infrastructure, agricultural production, manufacturing and other industries.

This growth will require more power.

And with the Electrify Africa Act on the cusp of supporting major local initiatives, it appears to be time for Kenya to prepare for an new era of economic growth.

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