Kenya is banking on public–private partnerships (PPPs) to mobilise a staggering $6.5-billion to implement the country’s electricity transmission plan, which will involve the construction of 18 000 km of high-voltage power lines by 2030.
Says Energy principal secretary Joseph Njoroge: “Every year, we need $970-million [to finance] the transmission projects and this will not be possible through exchequer resources. “This means we need to look for other opportunities to mobilise this financing.”
Over the past two years, the East African nation connected 1.6-million households to the national grid, bringing the country’s connectivity rate to 48%, with a target connectivity rate of 70% of households by the end of next year. The ultimate goal is to realise universal connectivity by 2020.
However, to achieve this goal, government needs the private sector to help it plug a financing shortfall of $5.9- billion. It has managed to raise about $615-million.
Private-sector players have given the electricity subsector a wide berth, owing to the sums required to implement energy projects and the long period it takes to recoup investments.
Many private investors in the energy arena have opted for the petroleum subsector, which has witnessed significant growth in demand and is increasing at 6% a year.
Although Kenya enacted a PPP law in 2013, a lack of guidelines on the transmission programme’s implementation has discouraged private investors from investing in the sector.
State-owned utility Kenya Electricity Transmission Company, which is responsible for power transmission infrastructure, is undertaking various projects covering a distance of 4 000 km, at a cost of $2-billion. The key projects to be implemented over the next three years include 1 600 km of 132 kV lines, 700 km of 220 kV lines, 1 000 km 400 kV lines and 700 km of 500 kV lines.