AfDB Approves $135m for Second Phase of Kenya’s Energy Project

The African Development Bank on Monday, June 27, 2016, approved a USD 135-million loan to launch the second phase of an energy project that is expected to benefit a minimum of 300,000 customers in Kenya, which would translate into providing electricity access to approximately 1.5 million people, mainly low income groups, and small businesses located near existing distribution transformers.

Kenya’s per capita electricity consumption of 130 kWh per month is quite low compared to an average 550 kWh for Sub-Sahara Africa, but electricity consumption is projected to increase by 45 percent at the end of 2017. Such surge in demand will require a concerted effort by the Government of Kenya (GoK) in conjunction with the country’s national electricity provider, Kenya Power, to reinforce supply to electrified areas through least-cost technical solutions that offer a combination of increased capacity, improved reliability and better voltage control.

The AfDB-supported Kenya Last Mile Connectivity project aims at helping the GoK and Kenya Power meet this increased demand by expanding the country’s distribution network through the extension of the low-voltage network from existing distribution transformers to reach households located within a 600-metre diameter.

It will also pre-finance low-voltage lines extensions and connection costs, including meters, to potential customers. Specifically, phase two of the project entails the supply of distribution material to reach 300,000 new connections; construction of low-voltage distribution lines; supervision and management; and capacity-building activities in targeted areas of expertise.

Alex Rugamba, AfDB Energy, Environment and Climate Change Department Director, stated, “The AfDB has been playing a leading role in financing and attracting financing for capital intensive energy-related infrastructure projects in the region. It will continue to maintain this momentum by promoting the spirit of its New Deal on Energy for Africa to bring projects which extend the provision of basic infrastructure to those in rural areas, such as the Kenya Last Mile Connectivity project.”

Aligned with the GoK’s objectives of raising the country’s access rate from the current 53% to 70% by 2017 and 100% by 2020, Kenya Power connected 25 percent more customers during its 2014-2105 financial year than the previous year, its largest yearly increase ever recorded. In the current financial year, Kenya Power connected over 1.17 million customers. As of mid-June 2016, Kenya Power registered over 4.7 million customers.

The total project cost of the program, including phase one, which was approved in November 2014, is almost USD 900 million. To date, it is being financed by the AfDB, Government of Kenya and the World Bank Group.

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