Kenya Electricity Transmission Company Limited · PDF fileKenya Electricity Transmission...

2011/12 | Annual Report and Financial StatementsKETRACO

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Annual Report and Financial Statements

2011/2012

Kenya Electricity Transmission

Company Limited

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“To be a world-class electricity transmission company and the leading inter-connector in Africa”

“To build and operate a national electricity transmission network that is reliable, efficient, effective, safe and en-vironment-friendly through innovative and best practices; and to promote regional power trade for socio-econom-ic development.”

The Company commits itself to attaining the highest standards in service delivery to all stakeholders.

The Company is committed to acting in an honest, transparent and re-sponsible manner while implementing its programmes.

The Company employees will work in unison at all levels and embrace a participatory approach in implementing all programmes and activities.

The Company will be a learning organization that embraces and continu-ously introduces change in its business processes.

The Company will embrace self-drive and hard work in attaining the high-est standards in service delivery to all stakeholders.

The Company will uphold the highest levels of impartiality by treating all stakeholders without any discrimination whatsoever.

The Company’s operations will be guided by professional ethics aimed at building an appropriate corporate culture and creating the right corporate image.

Our Vision

Our Mission

CREATIVITY AND INNOVATION

CUSTOMER FOCUS

TEAMWORK

INTEGRITY, TRANSPARENCY AND AC-COUNTABILITY

PROFESSIONALISM

EQUITY

COMMITMENT

1. Corporate Information.................................................................................2

2. Board of Directors....................................................................................4-5

3. Directors’ Profiles.....................................................................................6-7

4. Senior Management Staff...................................................................8-9

5. Notice of Annual General Meeting.....................................................10

6. Ilani Ya Mkutano Mkuu Wa Mwaka.......................................................11

7. Chairman’s Overview..........................................................................12-14

8. Muhtasari Wa Mwenyekiti.................................................................15-17

9. Managing Director’s Report.............................................................18-30

10. Ripoti Ya Mkurugenzi Mkuu...........................................................31-43

11. Corporate Governance Statement.............................................45-49

12. Report of the Directors...........................................................................50

13. Statement of Directors’ Responsibilities..........................................51

14. Report of the Independent Auditors.................................................52

15. Financial Statements •Statement of Comprehensive Income............................................53

•Statement of Financial Position.........................................................54

•Statement of Equity..................................................................................55

•Statement of Cash Flows.......................................................................56

•Notes to the Financial Statements.............................................57-76

16. Detailed Statement of Comprehensive Income.............................77

17. Map of Kenya:Transmission Network(Grid)..................................78

18. Pictorial..................................................................................................79-80

C O N T E N T S

Galu Sub-station

Annual Report and Financial Statements | 2011/12KETRACO

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Mr. Justus G. Kageenu – ChairmanEng. Joel M. Kiilu - Managing Director Mr. Patrick M. Nyoike, CBS Mr. Joseph K. Kinyua, CBSMr. Daniel K. MwauraMrs. Patience K. Nyaoga (Appointed 10.2.2012)Mrs. Elizabeth W. Maina (Appointed 10.2.2012)Ms. Esther N. M’ithiria (Appointed 10.2.2012)Mr. Fedesius Nyaga (Appointed 18.12.2012Mrs. Felister Kivisi - Alternate to Mr. Joseph Kinyua Eng. Julius Mwathani - Alternate to Mr. Patrick NyoikeHon. Jaafar M. Sheikh (Ceased 18.12.2012)Mr. Domiciano Maingi (Ceased 15.1.2012) Hon. Jimmy Angwenyi (Ceased 15.1.2012) Rev. Jessie Mutura (Ceased 15.1.2012)

Duncan K. Macharia, CPS (K)P.O. Box 34942 – 00100Nairobi. Kenya

2nd Floor, Capitol Hill SquareChyulu Road, Upper HillP.O. Box 34942 – 00100Nairobi – KENYA

Kenya Commercial Bank LimitedMoi AvenueP.O. Box 30081-00100Nairobi

Cooperative Bank of Kenya Limited, Upper Hill P.O. Box 48281-00100, Nairobi

Citibank, NA City House, Upper HillP.O. Box 30711-00100, Nairobi

Deloitte & Touche (For Auditor-General)Certified Public Accountants (Kenya) Deloitte Place, Waiyaki Way, MuthangariP. O. Box 40092 - 00100Nairobi

The Company maintains a Panel of Advocates

PRINCIPAL PLACE OF BUSINESS

DIRECTORS

SECRETARY

BANKERS

AUDITORS

ADVOCATES

CORPORATE INFORMATION


5Outdoor electrical equipment in a Sub-station.


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Eng. Joel M. Kiilu Managing Director

Mr. Fedisius Nyaga Director

Mr. Justus G. Kageenu Chairman

Mr. Daniel K. Mwaura Director

Mrs. Patience K. NyaogaDirector

Mr. Duncan Macharia Company Secretary

Mrs. Felister S. Kivisi (Alternate Director to Mr. J. Kinyua, PS, Treasury)

Mrs. Elizabeth W. Maina Director

Ms. Esther N. M’ithiria Director

BOARD OF DIRECTORS


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Ms. Margaret RatemoRep. Inspectorate of State Corporations

Mrs. Patience K. NyaogaDirector

Mr. Patrick Nyoike PS Ministry of Energy

Mr Joseph Kinyua PS Treasury

Mrs. Felister S. Kivisi (Alternate Director to Mr. J. Kinyua, PS, Treasury)

Mrs. Elizabeth W. Maina Director

Eng. Julius Mwathani (Alternate Director to Mr. P. Nyoike, PS, Min. of Energy)

NOT IN THE PICTURE:


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Mr. Kinyua is the Permanent Secretary, Ministry of Finance. He is a career economist having served in various capacities in the Treasury and Central Bank. He has also been involved in several projects with the International Monetary Fund both within Kenya and abroad. He holds MA and BA degrees in Economics (UoN).

Born in 1956, Eng. Joel Kiilu is an Electrical Engineer and holds a Masters degree in Business Administration (MBA) from the University of Nairobi. He also holds a Bachelor of Science (Bsc.) degree in Electrical Engineering from the same university.Eng. Kiilu is a member of Institution of Engineers of Kenya (MIEK), a member of the Institution of Electrical and Electronic Engineers (MIEEE). He joined The Kenya Power & Lighting Company Limited as a trainee engineer in 1977 and rose to the position of Chief Manager, Energy Transmission from which he left to join KETRACO in the year 2009 to date.


Mr. Joseph Kinyua, CBS PS, Treasury- Director

Born in 1947, Mr. Justus Kageenu holds a Bachelor of Commerce degree from the University of Nairobi and is also a Certified Accountant. Justus has spent most of his working life in the Energy Sector particularly in the Petroleum Sub-sector where he has worked for Exxon, Kenya Petroleum Refineries Limited (KPRL) and Shell.

He joined the Board of KPRL in 1997 and became Chairman in 2003 until February, 2009, when he was appointed the Chairman of the Board of KETRACO.

Mr. Patrick M. Nyoike was born in 1947. He holds a Bachelor of Science degree in Mathematics and Physics from University of Ghana and a degree in Economics from the University of Nairobi.

He is currently the Permanent Secretary, Ministry of Energy. Mr. Nyoike is a Director of all the state corporations within the Ministry of Energy.

BOARD OF DIRECTORS

Mr. Justus G. Kageenu Chairman

Mr. Patrick M. Nyoike, CBS PS, Energy - Director

Born in 1966, Mr. Daniel Karuru Mwaura is an Advocate of the High Court of Kenya in private practice and has practised Law for more than 13 years. Mr. Mwaura is also a Commissioner for Oaths, Notary Public and holds a Bachelor of Laws degree, Bachelor of Arts (Econ) both from Indore University and a post graduate diploma in Law from the Kenya School of Law.

Mr. Daniel K. Mwaura Director

Born in 1968, Mrs. Nyaoga holds an MBA from the University of Nairobi, International Business Admin-istration (IBA), USIU and has attended management courses both locally and internationally.

She is a member of Kenya Associations of Women Business Owners (KAWBO), Institute of Directors of Kenya(IOD)(K), PTA Braeburn School, All Saints Cathedral Church and Anglican University.

Mrs Nyaoga has worked for both private and public Corporations and is currently the Managing Director of Tintoria Limited. Patience was appointed to the Board of KETRACO on 10th February, 2012.

Mrs. Patience K. Nyaoga Director


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Mr. Duncan Macharia was born in 1960. He holds a Master of Business Administration degree from the University of Nairobi and a Bachelor of Commerce (Business Administration Option) degree from the same university. He is currently pursuing a Bachelor of Laws degree at the School of Law, University of Nairobi.

Duncan is a Certified Public Secretary of Kenya (CPS) K and previously worked as Deputy Company Secretary in The Kenya Power & Lighting Company Limited before he left after serving the company for over 18 years to join KETRACO. He is also a member of the Institute of Directors, (IOD) Kenya.

Mr. Duncan Macharia Company Secretary

Born in 1967, Felister Saliku Kivisi, serves as Senior Assistant Director in the Ministry of Finance, Debt Management Department. She holds a Bachelor of Arts degree from the University of Nairobi (1990) and a Master of Arts degree in International Relations from the University of Leeds (1992).

Felister who serves as Alternate Director to Mr. Joseph Kinyua, PS, Treasury, has a wealth of experience having worked in the Ministry of Finance from 1994 to date.

Mrs. Felister S. Kivisi (Alternate Director to Mr. J. Kinyua)

Born in 1962, Elizabeth is the holder of a Masters degree in Education (Planning & Administration), from the University of Nairobi and Bachelor of Education degree from Kenyatta University. She is currently pursuing a Diploma in Human Resource Management.

She has served in leadership positions as principal of various secondary schools, and as chairman of community based empowerment programmes and is a member of Mathira Constituency Development Fund and Secretary of the Bursary Committee. Elizabeth was appointed to the Board of KETRACO on 10th February, 2012.

Mrs. Elizabeth W. Maina, Director

Born in 1974, Esther Nkatha is pursuing a PhD in Business Administration (Finance Option) at the Uni-versity of Nairobi. She has a Master of International Economics and Management (Banking and Finance Option) from SDA Bocconi School of Management, Milan and a BCom (Accounting Option) degree from Kenyatta University. She is also a Certified Public Accountant, CPA (K) and a member of ICPAK. Esther has worked as a consultant, a financial and credit analyst in various institutions in Italy and Kenya. She works at the Catholic University of Eastern Africa in the Department of Accounting and Finance.

Esther is a Fellow of the Higher Education Academy, UK and a Board member and Trustee of Cardinal Otunga High School and Charitable Trust. She is also a Director Chlorophyll Investment Company Ltd. Esther was appointed to the Board of KETRACO on 10th February, 2012.

Ms. Esther N. M’ithiria, Director

Eng. Julius M. Mwathani was born in 1960. He holds a Bachelor of Science degree in Mechanical Engineering from University of Nairobi and an Executive Master of Business Administration degree from Jomo Kenyatta University of Agriculture and Technology.

He is a registered Consulting Engineer by Engineers Registration Board of Kenya and a member of the Institution of Engineers of Kenya. He has wide experience in public sector management, having worked for more than 20 years in various senior positions in Government. He joined the Board in September 2010 as an Alternate Director to Permanent Secretary, Ministry of Energy.

Eng. Julius Mwathani (Alternate Director to Mr. P. Nyoike)

Mr. Nyaga was born in 1944 & holds a BA degree in Accounting and Economics. He is a CPA and Secretary with over 30 years of experience in financial management. He joined the Board of Directors of KPLC in 1997 until 18th December 2012, when he was appointed a director of KETRACO. He is also a director of Thika Holdings Limited and Fide Registers Limited.

Mr. Fedisius Nyaga, Director


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Born in 1956, Eng. Joel Kiilu is an Electrical Engineer and holds a Masters Degree in Business Administration (MBA) from the University of Nairobi. He also holds a Bachelor of Science (Bsc.) degree in Electrical Engineering from the same university.

Eng. Kiilu is a member of Institution of Engineers of Kenya (MIEK), and a member of the Institution of Electrical and Electronic Engineers (MIEEE). He joined The Kenya Power & Lighting Company Limited as a trainee Engineer in 1977 and rose to the position of Chief Manager, Energy Transmission from which he left to join KETRACO in the year 2009 to date.

Born in 1960, Duncan holds a Master of Business Administra-tion MBA degree from the Uni-versity of Nairobi and a Bachelor of Commerce degree from the same University.

Duncan is a Certified Public Sec-retary of Kenya (CPS) K, who has wide experience in manage-ment and corporate secretarial function. He previously worked as Deputy Company Secretary in The Kenya Power & Lighting Company Limited before he left after serving the company for over 18 years before joining KETRACO as the Company Sec-retary. He is also a member of the Institute of Directors, (IOD) Kenya.

Born in 1970 Agnes holds a Bachelor of Commerce degree from the University of Nairobi, an Executive MBA from Moi University and a Post-Graduate Diploma in Human Resource Management from Kenya Institute of Management.

Agnes is a full member of both the Kenya Institute of Management (AMKIM) and Institute of Human Resource Management. Prior to joining KETRACO she worked with the First American Bank and Kenol/Kobil Petroleum Company.

Born in 1960, Mrs. Mumbua Giati holds a Bachelor of Commerce degree (Management Science option) from the University of Nairobi. Mumbua has a wealth of training and experience in IT, having worked for the Kenya Power & Lighting Company Ltd for 30 years and seen the company’s ICT transition from proprietary legacy systems to modern ERP solutions. She previously held the position of Chief Systems Analyst, SAP at Kenya Power before joining KETRACO as Head of ICT in December 2009.She is a member of the Computer Society of Kenya.

SENIOR MANAGEMENT STAFF

Mr. Duncan MachariaCompany Secretary

Ms. Agnes Ongadi Head of Admin, HR &

Corporate AffairsMrs. Mumbua Giati

Head of ICT



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Born in 1949, Joe Ager holds a Master of Business Administration degree (MBA) and a Bachelor of Science (BSc) in Marketing from the University of South Africa.Prior to joining KETRACO Ager worked as a Customer Relations and Marketing Manager with Kenya Power & Lighting Company Limited. He also worked as Managing Consultant with Sparrow and Barlow Associates, Head of Operations with British Telecoms–UK, Head of Strategy and Business Development with Caudwell Group Ltd. and with British Airways Plc (UK).

Born in 1973, CPA Barasa holds a Bachelor of Commerce (Accounting) and MBA-Finance Degrees from Kenyatta University. He is also a Certified Public Accountant of Kenya (CPA-K).He is a Council Member and Convenor of the Shared Services Committee of the Institute of Certified Public Accountants of Kenya (ICPAK).Prior to joining KETRACO, CPA Barasa worked as Treasury Manager and later Head of Factories Accounts at Kenya Tea Development Agency Limited. He also worked for Kenya Airways and East Africa Re in senior management positions. He has a wealth of experience in Accounting, Risk and Financial Management.

Born in 1968, John Mativo is a Civil Engineer and holds a Doctorate degree from Tokyo Metropolitan University (Japan), a Master’s degree from Tongji University (China) and a Bachelor’s degree from the University of Nairobi.John is a Registered Engineer (Kenya Engineers Registration Board) and a Corporate Member of the Institution of Engineers of Kenya. Before joining KETRACO as Head of Technical Services, he worked as a Consultant for European Union funded projects in the Local Government and as an Engineer in the Ministry of Roads and Public Works.

Dr. (Eng.) John MativoHead of Technical

ServicesCPA Fernandes O. Barasa

Head of Finance

Mr. Joe O. AgerGeneral Manager,

International Business

Transformer and allied equipment in a Sub-station.


12 NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT THE 3RD ANNUAL GENERAL MEETING of the Kenya Elec-tricity Transmission Company Limited will be held at Capitol Hill Square, 2nd Floor, Upper Hill, Chyulu Road, Nairobi, on 26th April 2013 at 11:00 a.m. to transact the following business:-

To read the Notice convening the Meeting.

To receive, consider and adopt the Company’s audited financial statements for the twelve months ended on 30th June 2012, together with the Chairman’s, Directors’ and Auditors’ Reports thereon.

To note that Directors do not recommend payment of a dividend for the period under re-view.

Election of Directors: To note that there will be no election or rotation of directors.

Whereas the Company was incorporated under the Companies Act, Cap 486, as a private company limited by shares, it is wholly owned by the Government. The Company is, there-fore, governed under the provisions of the State Corporations Act, Cap 446 by virtue of Section 2 (c) of the Act. Further, Article 2 of its Memorandum and Articles of Association provide that “The appointment and removal of Directors shall be governed by the provi-sions of the State Corporations Act, Cap 446, of the Laws of Kenya as amended from time to time. Each Director shall hold office until he is removed or replaced as above provided.” KETRACO has also complied with Cap 446 Section 6 which provides for the composition and appointment of Directors. Under the circumstances, there will be no election or rotation of Directors.

To note that the audit of the Company’s books of account will be undertaken on behalf of the Auditor General by M/s Deloitte & Touche, an audit firm appointed in accordance with Section 14(3) of the State Corporations Act, and Section 39(1)(b) of the Public Audit Act, 2003. M/S. Deloitte & Touche carried out the audit for the period ended 30th June, 2012.

To authorise the Directors to fix the Auditors’ remuneration.

To approve Directors fee of Kshs. 600,000 per Director per year, subject to concurrence of the Ministry of Energy and Treasury.

By Order of the Board

Duncan MachariaCompany Secretary4th April 2013

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ILANI YA MKUTANO MKUU WA MWAKAILANI INATOLEWA KWAMBA MKUTANO WA TATU WA KILA MWAKA wa Kenya Electricity Transmission Com-pany Limited utafanyika katika jumba la Capitol Hill Square, Gorofa ya Pili, Upper Hill, Barabara ya Chyulu, Nairobi, mnamo Aprili 26, 2013 saa 11:00 asubuhi kujadili yafuatayo: -

Kusoma Ilani ya kuitisha Mkutano huo.

Kupokea, kujadili na kuidhinisha taarifa za fedha zilizokaguliwa kwa muda wa miezi kumi na mbili kufikia tarehe 30 Juni 2012, pamoja na Ripoti za Mwenyekiti, Wakurugenzi na Mkaguzi wa hesabu.

Kufahamu kwamba Wakurugenzi hawapendekezi malipo ya gawio kwa kipindio cha mwaka unaoangaziwa.

Uchaguzi wa Wakurugenzi: Kufahamu kwamba hakutakuwa na uchaguzi au mzunguko wa wakurugenzi.

Ilhali Kampuni ilianzishwa chini ya Sheria ya Makampuni, Sura ya 486, kama kampuni binafsi inazo hisa kiwango fulani, ni inayomilikiwa na Serikali. Hivyo basi Kampuni inaongozwa na serikali chini ya masharti ya Sheria za Mashirika ya Uma , Sura ya 446 kwa mujibu wa sehemu ya 2 (c) cha Sheria. Aidha, Ibara ya 2 ya Mkataba wake na Makala ya Chama kutoa kwamba “miadi na kuondolewa kwa Wakurugenzi utaongozwa na masharti ya Sheria za Mashirika ya Uma, Sura ya 446, ya Sheria za Kenya kama ilivyorekebishwa mara kwa mara, kila mkurugenzi atashika kiti hicho hadi auondolewe au abadilishwe kama hapo juu inazotolewa”. KETRACO pia inakubaliana na Sura ya 446 sehemu ya 6 ambayo inatoa kwa muundo na uteuzi wa Wakuru-genzi. Chini ya hali hiyo, hakutakuwa na uchaguzi au mzunguko wa Wakurugenzi wakati huu.

Kufahamu kwamba ukaguzi wa vitabu vya Kampuni vya hesabu zitafanyika kwa niaba ya Mdhibiti na Mkaguzi Mkuu na M/S Deloitte & Touche, kampuni ya ukaguzi iliyoteuliwa kwa mujibu wa kifungu 14 (3) cha Sheria za Mashirika ya Uma, na sehemu ya 39 (1) (b) ya Sheria ya Ukaguzi wa Shirika za Umma, ya mwaka 2003.

M/S Deloitte & Touche ilifanywa ukaguzi kwa kipindi kilichomalizikia tarehe 30 Juni, 2012.

Kuwaruhusu Wakurugenzi kuamua malipo ya Wakaguzi ya kipindi kilichomalizika tarehe 30 Juni, 2012.

Kuidhinisha malipo kwa Wakurugenzi ya Kshs. 600,000 kwa kila mkurugenzi kila mwaka, ikisubiri kuidhin-ishwa na Wizara za Kawi na Fedha.

Kwa Agizo ya Halmashauri

Duncan MachariaKatibu wa Kampuni Aprili 4, 2013


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I am del ighted to present the third annual report and audited f inancial statements of the Kenya Electr ic i ty Transmission Company Limited for the twelve months per iod ended 30th June 2012.

The Kenyan economy performed modest ly in 2011 and real ized growth in gross domest ic product (GDP) of 4.4% compared to 5.8% in 2010 and 2.6% in 2009. This was attr ibuted to errat ic weather condit ions in the key agr icul tural areas, escalat ing internat ional oi l pr ices, weakening of the Kenya shi l l ing which led to high exchange rates and high inf lat ion which increased the cost of producing goods. The real GDP is expected to stabi l ize at 5.2% in 2012. Annual average in-f lat ion rose to 16% in June 2012 from 15.1% in January 2012 and 14.5% in June 2011.

The out look for 2012/2013 points to an increase in growth prospects as a resul t of increased f low of investment directed to infrastructure and low-er ing of inf lat ion together with reduct ion of for-eign currency exchange rates.

CHAIRMAN’S OVERVIEWReview of the Economy

Mr. Justus G. Kageenu - Chairman

Figure 1: Projected Peak Demand And Planned Electricity Generation

Year

s

MW

Source: Least Cost Power Development Plan 2011-2031


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Kenya’s Vision 2030 has ident i f ied energy as one of the infrastructural enablers of i ts

pi l lars, and electr ic i ty in part icular, is one of the prerequisi tes for the high qual i ty of l i fe desired under the Vision. Current ly, e lectr ic i ty contr ibutes approximately 9% of total energy needs with the remainder being from biomass and petroleum. The current electr ic i ty per capita consumption stands at only 148 ki lowatt hours (KWh) and nat ional connect iv i ty is about 30% both of which are below the average for developing countr ies. The growth in electr ic i ty has been affected by constrained supply, inadequate transmission capacity and high technical losses at both transmission and distr ibut ion levels. This has had an adverse effect on both rel iabi l i ty of supply and cost of electr ic i ty.

I t is in view of this that KETRACO has rol led out an ambit ious programmeme to construct new transmission infrastructure, rehabi l i tate di lapidated l ines and upgrade capacity of over loaded l ines. This wi l l address the chal lenges that have cont inued to plague the electr ic i ty sector in the country. The Government, on behalf of KETRACO, has cont inued to seek and obtain concessional funding from development partners which are supplemented by funds from the Exchequer to faci l i tate this expansion. In addit ion, the Company is working with regional power ut i l i t ies to fast t rack interconnect iv i ty in order to access cheaper electr ic i ty supply through regional power trade.

Review of the Electricity Sub-Sector

Review of PerformanceDuring the year, uni ts of electr ic i ty transmitted through the transmission l ines owned by KETRACO, in the f inancial year 2011/2012 were 408,840,260Kwh. This was an increase from the 364,000,000Kwh transmitted the previous year. The total income amounted to KShs.1,276 mil l ion compared to KShs.950 mil l ion in 2010/2011, whi le the total operat ing expenses for the per iod was KShs.1,218 mil l ion compared to Kshs.455 mil l ion for the previous year. Included in the total operat ing expenses for this year is a provision for doubtful debts amount ing to Kshs.592 mil l ion. The provision was made pending an agreement between Kenya Power and KETRACO on the method of calculat ion of transmission wheel ing charges.

Surplus for the year before tax was KShs. 58mil l ion whi le net surplus was KShs 34 mil l ion. This compares to a surplus before tax of Kshs.496 mil l ion and net surplus of Kshs. 438 mil l ion in the 2010/2011 f inancial year.

The asset base grew from Kshs.18,992 mil l ion in 2011 to Kshs.28,743 mil l ion this year. This represents an increase of 51% which is commendable.

KETRACO Board of Directors and Management members led by the Chairman Mr. Justus Kageenu (3rd left in back row) and the Managing Director, Eng. Joel Kiilu (2nd left in back row) sign 2012/2013 performance contract with the Permanent Secretary, Ministry of Energy, Mr. Patrick Nyoike (seated left)


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The Company has put in place an elaborate plan to fast-track the expansion of electr ic i ty transmission infrastructure. With more transmission l ines being

completed and commissioned, we expect to substant ia l ly increase the amount of power that wi l l be transmitted through the network, impact ing posit ively on The Company’s turnover. With the cont inued support of the Government, the development partners and al l other stakeholders, the planned transmission infrastructure projects wi l l be implemented successful ly which wi l l go a long way in achieving the targets set out for the real isat ion of Kenya Vision 2030.

Future Outlook

I once again express my sincere grat i tude and appreciat ion to the Board of Directors, Management, staff, the Government, part icular ly the Ministry of Energy and Ministry of Finance, and our development and business partners for their cont inued support which enabled KETRACO to achieve major mi lestones during the per iod under review.

I look forward to your cont inued support .

Mr. Justus G. KageenuChairman19th December, 2012

Tribute


17MUHTASARI WA MWENYEKITI

Bw. Justus G. Kageenu - Mwenyekiti

Nina furaha kuwasilisha ripoti ya mwaka wa tatu na taarifa za fedha zilizokaguliwa za Kenya Electricity Transmission Company Limited kwa kipindi cha miezi kumi na mbili hadi Juni 30, 2012.Uchumi wa Kenya ulikua kwa kasi ya katikatikatika mwaka wa 2011 kuelekezia kwa pato la taifa (GDP) la 4.4% ikilin-ganishwa na 5.8% mwaka 2010 na 2.6% katika mwaka 2009. Hii ilitokana na hali ya hewa isiyokuwa na uhakika katika maeneo muhimu ya kilimo, kuongezeka kwa bei ya mafuta ya kimataifa, udhaifu wa shilingi ya Kenya ambayo imesababisha viwango vya juu vya kubadilishana na mfu-muko wa bei ya juu ambayo iliongezea gharama ya kuzali-sha bidhaa. Pato la Taifa halisi linatarajiwa kuwa la kiwango cha kati cha 5.2% katika 2012. Wastani wa mfumuko wa bei umeongezeka kwa asilimia 16% katika Juni 2012 kutoka 15.1% katika Januari 2012 na 14.5% katika Juni 2011.Mtazamio wa mwaka ujao wa 2012/2013 unalenga uwapo wa ongezeko katika ukuaji na kuongezeka kwa mtiririko wa uwekezaji kwa madhumuni ya miundombinu na kupun-guza mfumuko wa bei pamoja na kupunguza viwango vya kubadilishana sarafu za kigeni.

TATHMINI YA SEKTA NDOGO YA UMEME Ruwaza ya Kenya 2030 (Vision 2030) imebainisha nishati kama moja ya wawezeshaji miundombinu ya nguzo zake na umeme hasa ni moja ya mahitaji ya ubora wa maisha yanay-otarajiwa na Ruwaza hiyo. Hivi sasa, umeme huchangia takriban 9% ya mahitaji ya jumla ya nishati na salio hupa-

tikana kwa kuni na petroli. Matumizi ya umeme nchini kwa kila mwananchi sasa ni kilowati 148 (kWh) na kitaifa wal-iounganishwa na gridi ya kitaifa ni 30%, vipimo vilivyo chini vikilinganishwa na nchi zingine zinazoendelea. Uenezaji wa umeme kote nchini, umeathiriwa na uwezo wa kusambaza na hasara za kiufundi katika ngazi zote za usambazaji wa umeme. Hii imekuwa na athari mbaya kwa wote kuegemea ya ugavi na gharama ya umeme.Ni kwa sababu hizo KETRACO imeanzisha mpango kabam-be wa kujenga upya laini za kusambaza umeme, kukarabati laini zilizochakaa na kuboresha uwezo wa laini kuhimili uzito wa umeme. Hii itashughulikia changamoto zinazoendelea kuwa pigo kwa sekta ya umeme nchini. Serikali kwa niaba ya KETRACO imeendelea kutafuta na kupata fedha zenye masharti nafuu kutoka wafadhili wa kimataifa ili kuongezea fedha kutoka Wizara yetu ya Fedha kuwezesha upanuzi. Pia, Kampuni inaendelea kushirikiana na kampuni za umeme za nchi jirani wakiegemea ujenzi wa laini za kusambaza umeme ili kuwezesha umeme wa bei nafuu kupitia nchi za kanda yetu.

TATHMINI YA UTENDAJIKatika mwaka huo, vipimo vya umeme vilivyo sambazwa kupitia laini za kusambaza zinazomilikiwa na KETRACO, kati-ka mwaka wa fedha 2011/2012 vilikuwa 408,840,260kWh. Hii ni ongezeko kutoka 364,000,000kWh mwaka uliopita. Jumla ya mapato yalifikia KShs.1.27 bilioni ikilinganishwa na KShs.950 milioni mwaka 2010/2011, wakati jumla ya gharama za uendeshaji kwa kipindi ilikuwa KShs. 1.218 bilioni ikilinganishwa na Kshs. 455 milioni kwa mwaka uli-opita. Pamoja katika jumla ya gharama za uendashaji kwa mwaka huu ni riziki kwa madeni ya jumla ya mashaka Kshs. 592 milioni. Ziada ya mwaka kabla ya kodi ilikuwa Kshs. 58 milioni wakati ziada wavu ilikuwa shilingi milioni 34. Hii inalinganishwa na ziada kabla ya kodi ya Kshs.496 milioni na ziada ya wavu Kshs. 438 milioni katika mwaka wa fedha 2010/201.Mali za kampuni zilikua kutoka Kshs.18.992 bilioni mwaka 2011 kwa Kshs. 28.743 bilioni mwaka huu. Hii inawakilisha ongezeko la 51% ambayo ni ya kupongezwa.

SIKU ZIJAZO Kampuni imeweka mipango kabambe kufafanua kwa haraka upanuzi wa miundombinu ya usambazaji umeme. Na hali laini zaidi za usambazaji umeme zikiendelea kukamilishwa, tunatarajia kiasi cha umeme utakao pita kwa laini hizo ki-uongezeke zaidi huku pia kikiinua juu mauzo yetu. Pamoja na kuendelea kuungwa mkono na Serikali yetu, washirika wa maendeleo na wadau wengine wote, miradi iliyopangwa ya usambazaji umeme itatekelezwa kwa mafanikio ambayo huenda ikatimiza malengo ya Ruwaza ya 2013 ya taifa.


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SHUKRANINinachukua nafasi hii tena kutoa shukrani zangu za dhati kwa Bodi ya Wakurugenzi, Wasimamizi wakuu, wafanya-kazi, serikali, hasa Wizara ya Nishati na Wizara ya Fedha, mashirika ya kifedha ya kigeni na washirika wa biashara kwa misaada yao iliyouwezeshwa KETRACO kufikia malen-go yetu ya kipindi hiki.Natarajia ushaikika huo kuendelea siku zijazo.

Bw. Justus G. KageenuMwenyekitiDesemba 19, 2012

Mkutano wa wafadhili watarajiwa kabla mradi wa Ethiopia-Kenya kuanzishwa


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A 23MVA transformer in Galu Sub-station


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REPORT OF THE MANAGING DIRECTOR FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2012

It gives me great pleasure to present an overview of KETRACO’s performance in the year 2011/2012.

During the period, there were a number of positive developments in the energy sector. The most important being the review of both the Energy Policy and the Energy Act to align the electricity sub-sector operations with the Constitution of Kenya, 2010.

KETRACO continued on its accelerated programmeme to extend the electricity transmission grid throughout the Country in order to increase power transmission capacity, reliability of supply and support enhanced connectivity by the Kenya Power and Rural Electrification Authority. This is guided by our commitment to customer focus, team work, creativity and innovation and professionalism. Other improvements during the year included enhanced human resource capacity, provision of better work environment, strengthened ICT infrastructure, review of institutional, legal and regulatory framework, introduction of enterprise risk management (ERM) review of medium and long term plans and improvement of service delivery mechanisms.

In line with KETRACO’s mandate which is to plan, design, construct, operate and maintain new high voltage electricity

transmission infrastructure that will form the backbone of the national transmission grid, the Company has made great strides towards achieving its mandate since inception in late 2008. In this respect, the lengths of high voltage electricity transmission lines were 1,331Km of 220kV and 2,112Km of 132kV, totalling 3,443Km as at June 2009.

Under the Least Cost Power Development Plan 2011-2031 (LCPDP), KETRACO is implementing several priority pro-jects totaling about 5,000km of transmission lines compris-ing 2300 km of 132kV, 1200km of 220kV and 1100km of 400kV AC lines as well as 612km of 500kV HVDC lines between 2012 and 2017. The identified and committed transmission lines, substations and regional interconnection projects are at various stages of development. This trans-mission development plan in the medium term is essential for system improvement, grid expansion and power evacu-ation from committed generation plants.

The total investment cost of the committed projects is esti-mated at US$ 2 Billion (Kshs. 175 Billion) at current prices. It is planned that by 2031 KETRACO will have constructed over 16,000 km of new transmission lines at an estimated cost of US$ 4.5 billion (Kshs. 390 Billion). The new trans-mission line projects are aimed at developing a robust grid system in order to improve quality and reliability of elec-tricity supply throughout the country and ensure adequate evacuation capacity that will enhance access, affordability and security of electricity supply in Kenya. Together with planned capacity development programmemes, the infra-structure development will strategically enable KETRACO to effectively play the future roles of power system and market operations.

OverviewEng. Joel M. Kiilu – Managing Director


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Figure 3: Length of Completed HV Transmission Lines (Km)

Figure 2: Project Financing

0

5,000

10,000

15,000

20,000

25,000

30,000

2008/2009 2009/2010 2010/2011 2011/2012 Cumm. todate

Ksh

Mill

ion

Period

Funding For Development Expenditure

Exchequer Funding

External Funds

Total Received

Source: Least Cost Power Development Plan 2011-2031.

Source: KETRACO Finance Division

Period

Leng

th


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At the beginning of the financial year, construction works on the following transmission line projects was on-going; Kili-mambogo – Thika - Githambo, Thika – Gatundu (Nyaga), Mumias - Rang’ala, Rabai – Malindi – Garsen – Lamu and Mombasa – Nairobi. At the close of the year, all the projects had progressed well and some were at advanced stages of completion.

In addition, the Company commenced construction of the following projects: - Kindaruma – Mwingi – Garissa, El-doret - Kitale and Kisii - Awendo all of which were handed over to the contractors during the year. Also during the year, Engineering, Procurement and Construction (EPC) contracts were awarded for the following projects; Loiyangalani - Sus-wa; Nairobi Ring Projects composed of Suswa – Isinya lines and five substations; Olkaria - Suswa; Meru – Isio-lo - Nanyuki. KETRACO also awarded engineering supervi-sion contracts Olkaria – Lessos - Kisumu; Ishiara - Kieni; Nanyuki - Nyahururu; Lessos - Kabarnet; Olkaria - Narok; Bomet - Sotik; and Mwingi – Kitui – Wote -Sultan Hamud lines and associated substations. Feasibility studies and preparation of bid documents for 12 other projects were completed. The Lessos - Tororo (Kenya - Uganda intercon-nector) and Eastern Electricity Highway (Ethiopia – Kenya)

PROJECTS IMPLEMENTATION

On-going Projectsinterconnector were at the design phase.

A detailed report on implementation of each of the projects is given here below:-

i ) System Strengthening Pro-jects The system strengthening and capacity enhancement pro-jects will improve transfer of electrical energy capacity and address the challenge of low voltages, high transmission losses, unreliability of supply and network security. These projects include:-

482km 400/220kV Mombasa - Nairo-bi line

The 482km 400/220kV double circuit line from the Rabai substation to Embakasi aims at bridging the gap between the supply of power in Coastal Region and demand in Nai-robi and the rest of the country. Construction commenced in

Transmission Line Length (KM) Commissioning Date

1 *Sondu Miriu – Kisumu 132kV 50 July 2007

2 Chemosit – Kisii 132kV line 62 March 2010

3 Rabai – Galu 132kV line 48 March 2010

4 Kamburu – Meru 132kV line 122 Sept 2010

5 Sang’oro – Sondu 132kV line 5 June 2012

6 Mumias-Rang’ala 132kV line 34 June 2012

7 **Kilimambogo-Thika-Githambo 132kV line 65 March 2013

8 Thika-Gatundu (Nyaga) 132kV line 30 March 2013

Total Length (KM) 428

*The Sondu-Kisumu line, was implemented through KenGen and handed over to KETRACO.**65km out of the 77km Kilimambogo – Thika - Githambo Line is complete, with the balance of 12km scheduled to be complete by end of April, 2013.

Table 1: Length of Completed HV Transmission Lines (Km)

The Company has completed 418km of 132kV as detai led below:-

Source: Least Cost Power Development Plan 2011-2031.


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Members of the Board and Management in a meeting with County Administration and contractors along Mombasa-Nairobi transmission Line Project.

December 2010 and is projected to be finished in Septem-ber 2013. The line has a power capacity of 1500MW. Funds availed by development partners are as follows:- AfDB- UA 50 million (Kshs. 6.4 billion). EIB- Euros 60 million (Kshs. 6.6 billion), AFD- Euros 60 million (Kshs. 6.6 billion) and GoK- Kshs. 2.1 billion. The construction and supervision contracts sum was Euros 117.05 (Kshs. 12.9 billion).

When complete, the project will facilitate stable and reliable power supply to other intermediate towns between Mom-basa and Nairobi especially satellite towns like Isinya, Athi River, Kitengela, Kisaju, and Mariakani facilitated by expan-sion of the substations and distribution network resulting in new opportunities for investment. Besides Athi River town, the project will supply quality power to the upcoming ce-ment, oil refineries, steel and other industries within Macha-kos and Kajiado counties; creating more job opportunities for Kenyan citizens. This transmission line will also facilitate efficient transportation of both goods and passengers by providing electricity to power modern electric trains.

The recently inaugurated Konza Techno city (Africa’s Silicon Savannah) will be a big beneficiary of the project since it will provide the necessary power requirement for the growth

and development of the city. The fast growing ICT sector in the country will enjoy reliable connectivity at lower costs that will be provided by the fibre optic cable installed on the transmission line. This will in turn improve ICT servic-es such as internet connectivity, secure e-banking among others.

The consultant for the project is Parson Brinckerhoff (UK), while the transmission line contracotor is Kalpataru (India) and the substation contractor is Siemens (France)

On the regional arena, Kenya and its neighbours; Uganda, Rwanda, DRC, Burundi, South Sudan and Tanzania will extensively benefit from this project by reduction of road transport and damage of our roads owing to establishment of new power plants at the coast, efficient pumping of fuel through pipelines and increased power trade resulting low demand in transportation of fuel. Regional interconnection will harness economic power surplus available in different countries throughout the year.


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328km 220kV Rabai – Malindi – Garsen - Lamu lineConstruction of the 328km 220kV single circuit transmis-sion line and substations at Malindi, Garsen and Lamu commenced in December 2010 and the project is expect-ed to be completed in June 2013. The line with a 230 MW rating is funded by Exim Bank of China & GoK at a total cost of KShs. 9.9 billion. The construction cost is financed by Exim Bank of China at RMB 636 million (Kshs. 8.7 billion) while local and consultancy costs are financed by GoK at Kshs. 1.2 billion. The contractor for the project is CAMC(E) of China and the engineering consultant is Parson Brinckerhoff of UK.

The project will reduce power losses between Kilifi and Malindi currently served by a low voltage line, displace the costly diesel plant at Lamu, supply power to the Lamu Port, the proposed Kilifi Resort City and part of the LAPSSET corridor. Beneficiaries in the agricultural sector will also include entities like the Tana River Development Author-ity irrigation schemes, the National Cereals and Produce Board (NCPB) grain stores at Garsen and the proposed sugar factories in Tana River County since reliable power will result in expanded irrigation, processing and storage of produce facilities. The line will help in expanding tour-ism and other cottage industries in the North Coast.

The main Jetty on Lamu Island with a banner commemorating the LAPSSET Launch in March 2012

Nairobi Ring and Associated Substations

The Nairobi Ring project involves the construction of a 100km 400kV double circuit line from Suswa substation to Isinya substation rated at 1300MW, five 220kV substations at Suswa, Ngong, Isinya, Athi River & Koma Rock and a 3km 220kV underground cable from Dandora substation to Koma Rock substation rated at 230MW. The contractors for the various components of the project are Jyoti Structures (India), Siemens (France) and Iberdrola (Spain). The consult-ants are Power Engineers (South Africa) and KEMA (Neth-erlands). The project is under construction and is expected

to be completed in September 2014. The project is being financed by AFD- Euros 98.5 million (Kshs.10.9 billion), EIB- Euros 17.8 million (Kshs. 2 billion) & GoK- Kshs. 1.4 billion at a total cost of Kshs.14.3 billion. Part of AFD’s and EIB’s contribution of Euros 20 million and 17 million respectievely, are savings from Mombasa-Nairobi Line project.

On its part, the Nairobi ring project will offer more than one alternative of supplying power into the Nairobi Metropolitan region. The increase in reliability of power supply will create a favourable climate for investment and growth in the capital city and surrounding areas. The Suswa – Isinya line por-tion will be a central piece in the transfer of power to/from Ethiopia, Tanzania and Uganda.

A ranch near Isinya which is traversed by part of the Nairobi Metropolitan Ring

300km 220/400kV Olkaria-Lessos-Kisumu line

Construction of the 300km 400/220kV line involves the construction of a 400kV double circuit line from Olkaria Ge-othermal Power Plant to Lessos, a 220kV double circuit line from Lessos to Kisumu, a new 220kV substation in Kisumu and extension of the existing Olkaria and Lessos substation. The line to Lessos will have a rating of 1200 MW while the line to Kisumu will have a rating of 500MW. The project is funded by JICA- Yen 12.4 billion (Kshs. 10.5 billion) & GoK-Kshs. 1.6 billion. The total cost of the project is Kshs.12.1 billion, and is expected to be completed in 2016.

The main purpose of the Olkaria-Lessos-Kisumu line is to facilitate the evacuation of clean energy from the geother-mal generation plants and help strengthen the link between the eastern and western parts of the grid. The project will satisfy the rapidly increasing power demand of the counties within the Western and North Rift regions by providing bulk energy transfer to these regions from the Olkaria energy hub. Several agricultural and industrial facilities like the tea factories in Nandi County, the factories within the Sugar belt (Miwani - Kibos) regions, the Kenya Agricultural Research Institute Station in Kibos, and the manufacturing industries


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located within Kisumu County will benefit immensely from the stronger power system.

The contract signing ceremony for the Olkaria-Lessos-Kisumu Project funding at Treasury. Hon. Uhuru Kenyatta (then Minister for Finance) flanked by Hon. Kiraitu Murungi (left) Minister for Energy, and H.E Toshihisa Takata, Japan’s Ambassador to Kenya

ii) Power Evacuation Projects

The following transmission lines will evacuate power from generation stations for transfer to load centres:-

430km 400kV Loiyangalani-Suswa line

Construction of the 430km 400kV double circuit line from the Lake Turkana Wind plant in Loiyangalani to Suswa sub-station is expected to commence in 2013 and be completed in 2015. The line is rated at 800MW and will be used to evacuate electricity from the 300MW Lake Turkana Wind Power plant. The line will also have adequate capacity to evacuate adequate electricity energy from future geothermal fields along the Rift Valley and wind farms in Northern Ken-ya (Marsabit).

The Loiyangalani substation and Loiyangalani – Suswa line is funded by the Spanish Government & GoK at a total cost of Kshs.18.3 billion, with the Spanish financing being Euros 110 million (Kshs.12.1 billion) while GoK is funding the balance of Kshs. 6.2 billion. The EPC Contract for the line was awarded to Ms. Isolux Ingeniera of Spain while the contract for construction of the substations was awarded to Siemens T&D. KEMA (Netherlands) are the engineering consultants for the project.

2x 25km 220kV Olkaria-Suswa lines

The Olkaria-Suswa project involves the construction of two 25km 220kV double circuit lines, one from the new 140MW Olkaria Iand, the other from the new 140MW Olkaria IV Ge-othermal power plants to Suswa substation. These lines are expected to be completed by April 2014. The lines have a combined capacity of 1000MW. They are financed by EIB and GoK at a cost of Kshs. 0.9 billion. The contractor for the line is KEC International from India.

5km 132kV Sangoro-Sondu line

The 5km 132kV single circuit line that links the 21.2MW Sangoro power station to Sondu Miriu power station was commissioned in March 2012. The project was funded by JICA & GoK at a cost of Kshs.1.2 billion. The project was implemented through KenGen.

KETRACO Board Members and staff during a familiarisation tour of the Loyangalani-Suswa Project

iii) Regional Interconnection Pro-jects

Regional interconnection projects aim to facilitate access of competitively generated elctricity from neighbouring coun-tries through power trade and stabilize power. These pro-jects are:

127km 400kV Lessos - Tororo line (Ugan-da-Kenya Interconnector)

Construction of the 127km 400kV double circuit line from the Lessos substation in Kenya to Tororo in Uganda will


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commence in April 2013 and is expected to be complet-ed in December 2014. The line is rated at 1200MW. This interconnector is part of the Nile Equatorial Lakes Subsid-iary Action Programme (NELSAP) that links the electricity network in Kenya to Uganda, Rwanda, Burundi and Eastern part of D.R. Congo. The project is funded by AfDB - UA 39.77 (Kshs. 5 billion) & GoK at Kshs. 0.5 billion. The con-sultant for the project is RSW International (Aecom) from Canada. The line will enable exchange of enhanced quantity of electricity between Kenya and Uganda.

612km Eastern Electricity Highway Project (Ethiopia-Kenya Interconnector)

The electricity highway linking Kenya to Ethiopia involves the construction of a 612km 500kV HVDC Bipolar line from Suswa substation to Ethiopia and convertor stations at either end. This will be a massive line with capacity to transfer 2000MW between the two countries. The project is expected to commence in April 2014 and be completed in December 2017. The project is to be funded by World Bank- USD 441 million (Kshs. 37.5 billion), AfDB- USD 118 million (Kshs. 10 billion), AFD- USD 118 million (Kshs. 10 billion) & GoK- USD 85 million (Kshs. 7.2 billion).

When completed, this line will enable Kenya to access cheaper electricity from Ethiopia. A power purchase agree-ment for 400MW of supply is already in place. The planned integration of the power networks will accelerate the de-velopment of regional energy resources that will help meet increasing electricity demand and reduce the cost of elec-tricity to the participating countries.

This will also allow Kenya and Ethiopia to exploit the large potential of diverse energy resources available for power generation which will enhance security of supply and will re-duce costs. Also, because the countries will transmit surplus energy generated largely from renewable energy resources, the interconnections will result in improved environmental quality from the reduced generation from fossil fuels.

93km 400kV Kenya-Tanzania Interconnector

The project is a component of the Kenya – Tanzania - Zambia interconnector and will link the Eastern Power Pool to the Southern African Power Pool through construction of this 400kV double circuit transmission line. The feasibility study for the proposed 507km Isinya – Arusha – Singida line will be completed in 2012. The estimated cost of the Kenyan segment is Kshs. 5 billion. Both Kenya and Tanzania are in the process of getting financiers.

iv) Electricity Access Projects

Projects grouped in this category fall under the Energy Ac-cess Scale-Up Programme and their main objective is to increase electricity access and address the challenge of low

penetration and low connectivity. The projects under this programmeme are as follows:

132kV Kilimambogo – Thika - Githambo and Thika – Gatundu (Nyaga) line

These two lines involve the construction of a 17km 132 kV double circuit line from the Tee-off at Kilimambogo to Thi-ka (Mangu) substation, followed by a 10km double circuit section before the two circuit split into a 50km single circuit line to Githambo and a 20km single circuit line to Gatundu. Each line has a rating of 73MW. The project includes the construction of Thika, Githambo and Gatundu substations. Kilimambogo-Thika, Thika-Gatundu and the new Mangu substation were energised in December, 2012, while the line to Githambo is expected to be energised by April 2013. The project is funded by KBC Bank of Belgium- Euros 24 million (Kshs. 2.64 billion) & GoK- 0.8 billion. The contractor for the project is CG Holding of Belgium. When commissioned, the project will ensure that Thika town and large parts of both Kiambu county and Muranga county have reliable electricity supply, thus spurring growth in the Industrial and Agricultural sector.

As part of project branding, KETRACO has erected project billboards around the country


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96km 132kV Nanyuki - Isiolo - Meru line

Construction of the 96km 132kV single circuit line from the Nanyuki substation to Isiolo and Meru is expected to be completed in September 2014. The project also involves the construction of a new substation at Isiolo and the extension of existing substations at Nanyuki and Meru. The line has a rating of 73MW. The project is funded by KCB Bank of Bel-gium- Euros 16 million (Kshs 1.76 billion) and GoK- Kshs. 0.7 billion. The contractor for the project is CG Holdings of Belgium.

Besides offering an alternative line for supply of electricity from two different hydropower stations, the line will be the reliable source of supply of electricity to Isiolo, city current being developed as a LAPSSET resort city.

34km 132kV Mumias - Rang’ala line

The 34km 132kV single circuit line from the Mumias to Rang’ala, with a power transfer capacity of 73MW, was commissioned in August, 2012. The project which also in-cludes the construction of Rang’ala substation and exten-sion of Mumias substation was funded by GoK at a cost of Kshs. 1.2 billion. Siaya and neighbouring Counties will greatly benefit from the supply of electricity.

The completed Rang’ala Sub-station at night

250km 132kV Kindaruma-Mwingi-Garissa line

This is among three key projects funded by the World Bank to the tune of USD 64 million (Kshs. 5.4 billion) under the Kenya Electricity Expansion Programmeme (KEEP). The scope of this project includes construction of a 132kV single circuit line from Kindaruma to Garissa via Mwingi with new substations at Mwingi and Garissa and extension works at the existing Kindaruma substation. The cost of this project is Kshs. 3.4 billion including the local component. The line construction contract was awarded to Tata Projects Ltd (India) and that for substations to KEC International Ltd (India). The project is expected to be completed by March 2014.

Besides improving electricity access to various areas along the transmission line route, this first high voltage transmis-sion line in Mwingi and Garissa country will add benefits including displacement of expensive and unreliable diesel generators in Garissa, evacuation of power to the National Grid from the proposed solar power and biomass genera-tion plants at Garissa and wind power in northern parts of Kenya.

60km 132kV Eldoret-Kitale line

This KEEP project involves the construction of 60km El-doret-Kitale 132kV single circuit transmission line, a new substation at Kitale and extension of the existing Eldoret substation. The contract for construction of substations was awarded to M/s ABB South Africa (Pty) Ltd and for the line awarded to KEC International (India). The project cost is Kshs. 1.4 billion including local costs.The line is expected to be complete by March, 2014. The project will greatly bene-fit the agricultural sector in the country’s bread basket and provide electricity access to many households.

44km 132kV Kisii-Awendo line

This KEEP project entails construction of a 132kV single circuit transmission line from Kisii to Awendo, a new sub-station at Awendo and extension of the existing Kisii sub-station. The contract for construction of the substation was awarded to M/s ABB South Africa (Pty) Ltd and for the line to KEC International Ltd (India). The project is expected to be completed by March 2014 and will cost Kshs.1.2 bil-lion. Besides providing additional reliable electricity access to the residents in that area, the line will benefit the sugar industry and provide an evacuation route of power from the proposed SONY Sugar Company co-generation plant to the National Grid.


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A transmission wayleave corridor in Kenya’s sugar belt

Kenya Power Transmission System Improve-ment Programmeme (KPTSIP)

The Kenya Power Transmission System Improvement Pro-grammeme (KPTSIP) is composed of the six lines below with a total length of 431km and 14 associated substations. The lines will each have a 73MW rating. The KPTSIP pro-gramme is funded by AfDB- UA 46.7 million (Kshs. 6 billion) and GoK- Kshs. 2 billion. The contracts for the transmission line have been awarded to Jyoti Structures (India) and the substation contracts awarded to CAMC(E) (China). The pro-jects are to commence in April 2013 and be commissioned by February 2015.

The lines will increase electricity access in Kabarnet, Nya-hururu/Rumuruti, Narok, Sotik, Bomet, Kitui, Wote, Sultan Hamud, Ishiara and Kieni areas. Availability of reliable elec-tricity supply will transform the areas into attractive loca-tions for agro-based and general industries thus going a long way into supporting the devolved Governments.

65km 132kV Lessos - Kabarnet line

The 65km transmission line project will involve construction of a 132kV single circuit transmission line from Lessos to Kabarnet, a new 132/33kV substation at Kabarnet and ex-tension of the existing Lessos substation.

79km 132kV Nanyuki - Nyahururu line

This project involves the construction of a 79km 132kV

single circuit transmission line from Nanyuki to Nyahururu (Rumuruti), a new 132/33kV substation at Nyahururu and extension of the existing Nanyuki substation.

68km 132kV Olkaria - Narok line

The 68km single circuit Olkaria to Narok line entails con-struction of a 132kV single circuit transmission line, a new 132/33kV substation at Narok and the extension of Olkaria substation.

33km 132kV Sotik - Bomet line

The 33km Bomet to Sotik line involves constructing a 132kV single circuit transmission line and 132/33kV substation at Bomet and Sotik.

153km 132kV Mwingi – Kitui - Wote - Sul-tan Hamud line

This involves constructing of a 132kV single circuit trans-mission line from Mwingi through Kitui, Wote to Sultan Ha-mud with new 132/33kV substations at Kitui, Wote and Sul-tan Hamud, and extension of the Mwingi substation.

33km 132kV Ishiara - Kieni line

The transmission line project scope includes construction of a 33km 132kV single circuit transmission line from Ishi-ara to Kieni, a 132/33kV substation at Kieni and switchgear at Ishiara.

v) Other Projects

KETRACO has identified additional projects to improve elec-tricity access and strengthen the transmission network. In this regard, feasibility studies were completed and draft bid documents prepared for the following projects, which have been funded by the EXIM Bank of India:-

The EXIM Bank of India and GoK funded the following Pro-jects :

a) Turkwel – Ortum – Kitale line; The 90km 220kV single circuit line from the Turkwel pow-er plant to Ortum and Kitale; with a rating of 250MW. The project includes one new substation that will be constructed in Ortum and the Kitale and Turkwel substations expanded.

In addition to providing an alternative power supply path to Kitale, it will mainly supply power to the proposed cement industry at Ortum.


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b) Machakos – Konza – Kajiado – Namanga line;

The 153km 132kV single circuit line from Machakos to Kon-za, Kajiado and Namanga; with a rating of 73MW. The pro-ject includes four new substations that will be constructed in Machakos, Konza, Kajiado and Namanga.

The project will strengthen the existing power network in addition to increasing access to electricity in Machakos, Konza, Kajiado and Namanga and their environs. Reliable supply of electricity will result in rapid growth in the Meat and Meat-products industries in Kajiado country. The first phase of the ICT city at Konza will be supplied electricity using this line.

The total 243km transmission lines and associated substa-tions will be funded by India Exim Bank & GoK at a total cost of Kshs. 6.8 billion. The India Exim Bank is providing USD 62 million. The projects are expected to be commissioned in March 2015.

c) Sondu - Homabay - Awendo line

KBC Bank of Belgium & GoK funded the Sondu – Homa Bay – Awendo line. The 90km 132kV single circuit line from the Sondu power plant to Homa Bay and Kitale; with a rating of 72MW will include one new substation at Homa Bay and extension of Sondu and Awendo substations. The contractor for the project is CG Holdings of Belgium and the project is expected to be completed in 2016. The project is estimated to cost Kshs. 2.1 billion. It aims at strengthening the existing power network in the Western Region of Kenya and increasing access to electricity in Homa Bay County for the development of fish industry.

vi) Projects requiring financing

KETRACO has identified additional transmission lines pro-jects that require financing. Some of the lines are intended to strengthen the power networks in Maua, Maralal, Migori/Isabenia, Lunga Lunga and Chogoria. Others will facilitate connection of the isolated power stations (i.e Hola, Bura, Habaswen and Wajir) to the National Grid and increase electricity access aimed at enhancing development in the regions. These projects include the following:

a) Meru - Maua line; The 50km 132kV single circuit line with a rating of 73MW will involve the construction of one new substation at Maua and the extension of Meru substation. The total construction cost and wayleave acquisition cost is estimated at Kshs.1.3 billion. The line will benefit the agricultural industry in gen-eral.

b) Nyahururu - Maralal line; The 148km 132kV single circuit line with a rating of 73MW will also construction of one new substation at Maralal and extension of Nyahururu substation. The total construction cost and wayleave acquisition cost is estimated at Kshs. 2.0 billion. Beneficiaries of the line will include large scale ranch owners and proposed solar generation in the area around Maralal.

c) Awendo – Migori/Isabenia line;The 50km 132kV single circuit line with a rating of 73MW will also involve the construction of one new substation at Migori/Isabenia and extension of Awendo substation. The total construction cost and wayleave acquisition cost is es-timated at Kshs.1.5 billion. The line will result in growth in the sugar industry and also offer an opportunity for power trade with Northern Tanzania.

d) Garsen – Hola – Bura - Garissa line; The 240km 220kV single circuit line with a rating of 250MW will also involve the construction of two new substation at Hola and Bura and extension of Garsen and Garissa substa-tions. The total construction cost and wayleave acquisition cost is estimated at Kshs. 9.0 billion. The line runs parallel to Tana River and therefore will open up areas for irrigation, agricultural product industries and reliable storage.

e) Galu – Lunga Lunga line; The 60km 132kV single circuit line with a rating of 73MW will also involve the construction of one new substation at Lunga Lunga and extension of Galu substation. The total construction cost and wayleave acquisition cost is estimat-ed at Kshs.1.6 billion. The line will benefit the mining in-dustry, sugar industry, cashew-nut industry besides being available for power trade with Northern Tanzania.

f) Ishiara – Chogoria line; The 40km 132kV single circuit line with a rating of 73MW will also involve the construction of one new substations at Chogoria and extension of Ishiara substation. The total con-struction cost and wayleave acquisition cost is estimated at Kshs.1.6 billion. The line will benefit the agricultural industry.

g) Garissa – Habaswen - Wajir line; The 330km 220kV single circuit line with a rating of 250MW will also involve the construction of two new substations at Wajir and Habaswen and the extension of Garissa sub-station. The total construction cost and wayleave acquisi-tion cost is estimated at Kshs.9.5 billion. Reliable supply of electricity will also result in rapid growth in the Meat and Meat-products industries in Garissa and Wajir counties.


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vii) Projects under Feasibility Stud-ies in 2013 (As per HE Brief)

KETRACO is undertaking feasibility studies to address the existing weak National Grid and improve electricity access in various parts of the country. The lines are:

38km 400kV Isinya - Konza line

The 400kV double circuit line will link the future ICT city at Konza with the National Grid, and in particular, the genera-tion stations in Olkaria, Menengai and Ethiopia through the Suswa – Isinya line and the generation stations in Mom-basa and Northern Tanzania through the Isinya substation. Besides offering an alternative line for supply of electricity the line will provide reliable supply of electricity to the ICT city for 20yrs.

205km 400kV Longonot - Thika - Kangundo – Konza line

The 205km 400kV double circuit line will complete the 400kV Nairobi Ring that is currently under construction, by providing the northern link from the Suswa (Longonot) sub-station, passing along the northern outskirts of Nairobi and terminating at Konza. This line will in turn be connected to the southern link through the Konza – Isinya – Suswa line. The line will strengthen the National Grid and offer reli-able N-1 security.

70km 220kV Kisumu - Kakamega – Musa-ga line

The 220kV double circuit line will ensure that Kakamega and Musaga have an alternative reliable supply line to compli-ment the 132kV line from Lessos to Tororo.

235km 220kV Lake Victoria Ring

A 220kV Ring around Lake Victoria will provide a strong transmission line link connecting Kenyan towns around Lake Victoria to Musoma, Mwanza, Bukoba in Tanzania and Masaka, Kampala and Jinja in Uganda. The ring will offer opportunities for power trade in the region.

288km 220kV Kiambere – Maua – Isiolo line

Under the LAPSSET programmeme Isiolo has been ear-marked to be developed into an international resort city. The 220kV transmission line from Kiambere Power Plant will ensure that Isiolo is supplied with adequate electricity to meet its energy need.

152km 220kV Isiolo – Maralal line

The line will be used as an alternative transmission line for power evacuation from future wind, solar and geothermal sites in middle regions of the Rift valley to the National Grid.

306km 220kV Isiolo – Marsabit line188km 400kV Loiyangalani – Marsabit line

The two lines will assist in harnessing the full potential of wind generation resource in northern Kenya by connecting potential wind farms sites with the National Grid.

Kenya Electricity Transmission Expansion Programmeme

In order to increase electricity access and address the chal-lenge of low penetration and low connectivity, the following 900km lines are proposed;

84km 132kV Ngong – Magadi line73km 132kV Webuye - Kimilili – Kitale line25km 132kV Kakamega – Kaimosi line41km 132kV Myanga – Busia line70km 132kV Rang’ala - Bondo – Ndigwa line73km 132kV Homa Bay – Sindo line74km 132kV Ndhiwa – Karungu line48km 132kV Sotik – Kilgoris line144km 132kV Kitui - Mutomo – Kibwezi line40km 132kV Uplands – Limuru line228km 132kV Turkwel – Lodwar – Lokichogio line

OTHER ACHIEVEMENTSI am glad to report that the Company has achieved satisfac-tory results on many fronts through our unreserved efforts in spearheading the company’s Strategic Plan. During the period under review, KETRACO Management continued to review and strengthen the frameworks, policies, structures and processes in order to better align them to its growth strategies. Key achievements have been made on some of these as is shown here under.

Human Resource Development

In recognition that a well-developed human resource is the lever that drives operational performance, the Company has endeavoured to ensure that every employee is prop-erly placed and equipped to perform the responsibilities as-signed to them.


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To further strengthen the human resource capital, the Com-pany commissioned a Training Need Analysis which was completed in the year. The report recommended a three year training programmeme that will bridge the identified compe-tency and skills gaps. The plan is already being implement-ed through both customised and generic training program-memes offered locally and abroad.

In addition, a job evaluation exercise was also completed and the final report’s recommendations are now under im-plementation. The job evaluation exercise has enabled KET-RACO to align its human capital to the strategic objectives and attain internal efficiency and internal equity relative to job value.

KETRACO believes that effective recruitment and continuous training are critical to its success. In the year under review, 21 additional staff were recruited leading to increase in the staff complement from 107 to 128 at the close of the year. Competency development level also increased from 62.7% to 66% in the same period. The staff turnover still remains nil.

The staff welfare programmemes continued to be reviewed to ensure that KETRACO remains a competitive employment destination. An Employee Satisfaction Survey carried out at the end of the year showed that employee satisfaction index had risen from 77% to 79%.

In order to ensure diversity is addressed within the Company,

a gender mainstreaming policy was developed and employ-ees sensitized on gender issues through workshops. Gender parity was maintained during recrui tment with the gender rat io being 33%. In addit ion, a disabi l i ty mainstreaming plan was implemented and staff sensit ized through awareness workshops.

Automation of Operat ionsThe Company is committed to building and investing in a world-class modern ICT-enabled infrastructure in order to enhance its operations and service delivery. Towards this objective, all our transmission lines have been designed in-corporating Optical Ground Wire (OPGW) to facilitate the use of Supervisory Control & Data Acquisition and Energy Management Systems (SCADA/EMS) for automated oper-ations.

Excess fibre optic capacity will be leased to Service Pro-viders.

Performance Management As an organisation KETRACO subscribes to the adage that “what gets measured gets done”. Therefore, performance management remains critical to realization of the corporate objectives and has been institutionalized across the entire organization. The third Performance Contract for the peri-od 2011/2012 was signed between the Board and Govern-ment. I am glad to report that during the annual evaluation for 2011/12, the Company’s performance was rated “Very Good”.

KETRACO staff and Board Member Mrs. Fel ister Kiv is i (Centre) celebrate during the Company’s Annual Staff party


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ISO CertificationThe Company made significant progress towards ISO Cer-tification and during the year under review, implementation of ISO Quality Management System was officially launched. A customer sat isfact ion survey that was con-ducted at the end of the year showed that the sat isfact ion index had increased from 71.90% to 74.8% during the year.

Service Delivery InnovationsThe Company initiated a service delivery innovation through which a Geographical Information System (GIS) called ArcGIS was implemented for analysis and geo-processing of aerial survey data (LiDAR), cadastral and other trans-mission line route data. This improved functional efficiency in implementation of projects through increasing surveying accuracy, reducing design time and costs.

Corporate Social Responsibility

As a responsible corporate citizen, KETRACO is commit-ted to engaging with local communities in project affected areas, general public and energy sector and cultivate their goodwill. The Company therefore pro-actively participates in such engagements as guided by its Corporate Social Re-sponsibility Policy.

KETRACO ensures that all projects are carried out through a consultative process with stakeholders. The Company, fur-ther ensures that its operations are carried out observing hu-mane and best practices taking into account that construc-tion of transmission lines may involve acquisition of land for substations and wayleaves access for transmission lines.

Board Members at the Nyaga Sub-Stat ion during a tour of the Ki l imambogo-Thika-Githambo Project. The Board Members got a chance to interact with future engineers and innovators

Project Affected Persons along the Suswa-Ngong project are sensit ised on the Company and i ts projects by KETRACO staff.

GRATITUDE

I would like to thank all our stakeholders, including the Government, development partners, consultants, contrac-tors, project-affected-persons and especially the staff, for their continued co-operation and support during the year 2011/2012. None of the great strides achieved and enumer-ated in the report herein would have been possible without your support.

I look forward to the year ahead with optimism as various projects under implementation are lined up for commission-ing and thus achieving our goal of improving the transmis-sion network.

Eng. Joel KiiluManaging Director 19th December, 2012

Supply Chain Management Off icer inspects spares handed over by the contractors, Nat ional Contract ing Company Ltd after complet ion of the Mumias-Rang’ala transmission l ine project


33TAARIFA YA MKURUGENZI MKUU YA MWAKA UNAOISHA 30 JUNI 2012

Nina furaha kubwa kuwapa maelezo ya jumla ya utendaji wa KETRACO katika mwaka 2011/2012.

Kipindi tunachoangazia kiliweza kuleta motokeo na maende-leo mema kwa sekta ndogo ya umeme kama vile mareke-bisho ya Sera na Sheria ya Nishati ili vyombo hivyo vya kisheria viweze kulingana na maazimio ya Katiba ya Kenya, 2010.

KETRACO iliendelea kudumisha mipango yake ya kasi ya kupanua usambazaji umeme kupitia upanuzi wa gridi ya umeme ya taifa ili kuongeza uwezo wa kusambaza umeme, kuegemea ugavi wa umeme madhubuti, na kusaidia kam-puni za Kenya Power na Rural Electrification Authority kuz-idisha usambazaji wa umeme, huku tukiongozwa na ahadi zetu kwa wateja, ubunifu, umoja, uvumbuzi na taaluma.

Maboresho mengine wakati huo ni pamoja na kuimarishwa kwa wafanya kazi wa Kampuni, utoaji wa mazingira bora ya kazi, kuimarishwa kwa miundombinu kwa Teknolojia za Mawasiliano, urekebishaji wa miundo ya kitaasisi, kisher-ia na udhibiti, kuanzishwa kwa biashara ya usimamizi wa hatari (Enterprise Risk Management), marekebisho ya mip-ango ya kati na ya muda mrefu na uboreshaji wa taratibu za utoaji wa huduma.

Sambamba na mamlaka za KETRACO ambazo ni ya ku-panga, kubuni, kujenga, kuendesha na kudumisha laini za umeme wa volti kubwa ambazo zitaumba Gridi ya Taifa ya usambazaji umeme. Kampuni imepiga hatua kubwa katika kufikia majukumu yake tangu kuanzishwa mwisho wa mwa-ka 2008. Kampuni iliridhi laini za umeme wa volti kubwa za kusambaza umeme. Wakati ule zikuwa 1,331Km ya 220kV na 2112Km ya 132kV, kwa jumla zilikuwa 3,443Km Juni 2009.

Mradi Urefu (KM) Siku ya Kukamilika

1 *Sondu Miriu – Kisumu 132kV 50 Julai 2007

2 Chemosit – Kisii 132kV line 62 Machi 2010

3 Rabai – Galu 132kV line 48 Machi 2010

4 Kamburu – Meru 132kV line 122 Septemba 2010

5 Sang’oro – Sondu 132kV line 5 Juni 2012

6 Mumias-Rang’ala 132kV line 34 Juni 2012

7 **Kilimambogo-Thika-Githambo 132kV line 65 Machi 2013

8 Thika-Gatundu (Nyaga) 132kV line 30 Machi 2013

Urefu kwa jumla (KM) 428

* Laini ya Sondu-Kisumu, ilitekelezwa kupitia KenGen na kukabidhiwa kwa KETRACO.** Laini ya 65km ya Kilimambogo - Thika - Githambo imekamilika kamili, na ilhali ile ya 12km ime-pangwa kuwa tayari ifikapo mwishoni mwa Aprili, 2013.

Mhandisi Joel M. Kiilu – Mkurugenzi Mkuu


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Chini ya Mpango wa Least Cost Power Development Plan 2011-2031 (LCPDP), KETRACO inatekeleza miradi kadhaa ya kipaumbele ya idadi ya 5,000km ikiwa 2300km za 132kV, 1200km za 220kV na 1100km za 400kV na pia 612km za 500kV za aina ya HVDC kati ya 2012 na 2017. Miradi iliyotambuliwa na kupewa kipaumbele, vituo vidogo na miradi ya kikanda zinaendelea kutekelezwa. Mipangilio hiyo ya usambazaji umeme ya muda wa katikati ni ya mu-himu kwa mfumo wa uboreshaji, upanuzi wa gridi na uokoaji nguvu kutokana miradi ya utoaji umeme kutoka kampuni za uzalishaji umeme.

Jumla ya gharama ya uwekezaji wa miradi iliyokubaliwa in-akadiriwa kuwa dola za Marekani 2 bilioni (Kshs. 175 bil-ioni) kwa bei za sasa. Imepangwa kuwa kufikia mwaka wa 2031 KETRACO itakuwa imejenga zaidi ya 16,000km za laini mpya za usambazaji umeme kwa gharama inayokadi-riwa dhamani ya dola za Marekani 4.5 bilioni (Kshs. 390 bilioni). Miradi mipya ya laini za usambazaji umeme zina lengo la kuendeleza gridi iliyo shupavu ili kuboresha ubora na kuegemea ugavi dhabiti wa umeme nchini kote, na pia kuhakikisha kutosha upatikanaji, kuendesha na usalama wa umeme nchini Kenya. Pamoja na mipango ya kuimarisha uwezo, maendeleo ya miundombinu itawezesha KETRACO kwa ufanisi majukumu ya baadaye ya mfumo wa nguvu na oparesheni za soko.

UTEKELEZAJI WA MIRADI

Katika mwanzo wa mwaka wa fedha, kazi ya ujenzi kati-ka miradi ifuatayo ilikuwa inaendelea; Kilimambogo-Thi-ka-Githambo, Thika-Gatundu (Nyaga), Mumias-Rang’ala, Rabai-Malindi-Garsen-Lamu na Mombasa-Nairobi. Wakati wa kufunga mwaka, miradi yote ilikuwa inaendelea vizuri na baadhi ilikuwa katika hatua za mwisho ili kukamilika.

Aidha, Kampuni ilianza kazi ya ujenzi wa miradi ifuatayo: - Kindaruma-Mwingi-Garissa, Eldoret-Kitale na Kisii–Awen-

do. Miradi hiyo yote ilikabidhiwa kwa makandarasi katika mwaka huo. Pia katika mwaka huo, kandarasi zilitolewa kwa ajili ya miradi ifuatayo; Loiyangalani - Suswa; Mzunguko wa Nairobi , mradi unaojumuisha Suswa – Isinya, laini na vit-uo tano; Olkaria - Suswa; Meru - Isiolo - Nanyuki. KETRA-CO pia ilipeana kazi ya uhandisi na usimamizi wa miradi ya laini na vituo vidogo vya Olkaria - Lessos - Kisumu; Ishiara - Kieni; Nanyuki - Nyahururu; Lessos - Kabarnet; Olkaria - Narok; Bomet - Sotik; na Mwingi - Kitui - Wote-Sultan Ha-mud. Kazi za Upembuzi yakinifu na maandalizi ya nyaraka za zabuni kwa ajili ya miradi 12 zilikamilika. Miradi ya Kikanda ya Lessos - Tororo (Unaounganisha Kenya na Uganda ) na Barabara ya Umeme ya Afrika Mashariki (Eastern Electricity Highway) ambayo inaunganisha Ethiopia na Kenya pia iliku-wa katika awamu ya kubuni.

Ripoti ya kina kuhusu utekelezaji wa kila moja ya miradi hiyo inapatikana hapa chini: -

I) Miradi ya Uimarishaji wa Mfumo Miradi hii inahusu uimarishaji wa mfumo na miradi ya kuku-za uwezo na kuboresha uwezo wa nishati ya umeme na kukabiliana na changamoto ya volti za chini, hasara kubwa inayopatikana wakati wa usambazaji umeme, kukosekana kwa uhakika wa ugavi na usalama wa mtandao. Miradi hio ni pamoja na: -

Laini ya kusambaza umeme ya Nairobi - Mombasa (482 km 400/220kV)

Mradi huu unahusu ujenzi wa laini ya 482km yenye uwezo wa 400/220kV katika saketi mbili kutoka kituo kidogo cha Rabai hadi kituo cha umeme cha Embakasi. Mradi huu un-alenga kuziba pengo baina ya usambazaji wa nguvu katika Mkoa wa Pwani na mahitaji ya Nairobi na maeneo mengine ya nchi. Ujenzi ulianza Desemba 2010 na inakadiriwa kuwa utamaliziwa Septemba 2013. Laini hii ya kusambaza umeme

2008/2009 2009/2010 2010/2011 2011/2012 Hadi leo

Ufadhili kutoka kwa hazina ya serikali

300 3184 3696 3,512 10,692

Ufadhili kutoka wafadhili wengineo

0 4208 3853 7,968 16,029

Jumla 300 7392 7549 11,480 26,721

Nambari ziko katika Kshs. (Milioni)

Jedwal i 2: Gharama ya Ufadhi l i wa Kuimarisha Miradi

Mwaka


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Kifaa cha kisasa kinacho tumika kufunga nyaya za umeme kwenye minara katika mradi wa Mombasa-Nairobi

ina uwezo wa kubeba nguvu za umeme kiasi cha 1500MW. Mradi huu unafadhiliwa na: AfDB - Dola za Marekani 50 mil-ioni (Kshs. 6.4 bilioni), EIB- Euro 60 milioni (Kshs. 6.6 bilio-ni), AFD- Euro 60 milioni (Kshs. 6.6 bilioni), na Serikali ya Kenya- Kshs. 2.1 bilioni. Gharama ya ujenzi na ushauri wa uhandisi ilikuwa Euro 117.05 (Kshs. 12.9 bilioni).

Ukikamilika, mradi utawezesha usambazaji wa umeme im-ara na wa kuaminika kwa miji mingine katikati ya Momba-sa na Nairobi kama vile miji midogo ya Isinya, Athi River, Kitengela, Kisaju, na Mariakani. Pia utawezesha upanuzi wa vituo vidogo na mtandao wa usambazaji kusababisha fursa mpya kwa ajili ya uwekezaji. Inatarajiwa kuwa mradi huu utawezesha viwanda vipya vya saruji, usafishaji wa mafuta ya petrol na kuchoma vyuma karibu na kaunti za Machakos na Kajiado. Laini hii pia itawezesha usafiri bora wa bidhaa na abiria kwa kutoa umeme kwa gari moshi ya kisasa ya umeme.

Mji wa Teknologia wa Konza (Afrika Silicon Savannah) ulioz-induliwa hivi juzi unalegwa na mradi huu pia ili kutoa nguvu za umeme za kutosha mahitaji kwa ajili ya ukuaji wa uchumi na maendeleo ya mji huo. Kukua kwa haraka kwa Teknolo-gia ya Mawasiliano (ICT) katika nchi kutachangiwa pia kwa kuwa mradi huu unauwezo wa kusambaza na kuimarisha tovuti kupitia huduma zinazotolewa na kamba ya fiber optic ambayo imewekwa juu ya laini za usambazaji umeme. Hii itaboresha huduma za Teknologia ya Mawasiliano (ICT) na huduma zinginezo.

Mshauri kwa ajili wa mradi ni Parson Brinckerhoff (Uin-gereza), na mkandarasi wa laini ya usambazaji umeme ni Kalpataru (India) na wa vituo vidogo akiwa ni Siemens (Ufaransa)

Upande wa miradi ya kikanda, Kenya na majirani wake; Uganda, Rwanda, DRC, Burundi, Sudan Kusini na Tanza-nia, watafaidika sana na mradi huu na kupunguza usafiri kua na uharibifu wa barabara zetu kutokana na uanzisha-ji wa mitambo ya uzalishaji wa umeme katika sehemu ya pwani, ufanisi katika kusukuma mafuta kupitia mabomba na kuongezeka kwa biashara ya nguvu za umeme kusababisha mahitaji ya chini katika usafirishaji wa mafuta. Kuunganish-wa kwa kanda na gridi kutaweza kuchangia pakubwa uwezo wa kubadilishana umeme kibiashara kati ya nchi hizi.

Laini ya kusambaza umeme ya Rabai - Ma-lindi - Garsen – Lamu ( 328 km 220kV )

Ujenzi wa laini ya 328km yenye uwezo wa 220kV pamoja na vituo vidogo vya Malindi, Garsen na Lamu ulianza mnamo Desemba 2010 na unatarajiwa kukamilika Juni 2013. Mradi huu wenye uwezo wa kusafirisha 230MW unafadhiliwa na Exim Bank of China pamoja na Serikali ya Kenya kwa ghara-ma ya jumla ya Kshs.9.9 bilioni. Ujenzi unafadhiliwa na Exim Bank of China- RMB 636 milioni (Kshs. 8.7 bilioni) na ush-auri wa uhandisi unafadhiliwa na Serikali ya Kenya - Kshs. 1.2 bilioni. Mkandarasi kwa ajili ya mradi huo ni CAMC(E) wa China na mshauri wa uhandisi ni Parson Brinckerhoff wa Uingereza.


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Mradi huu utapunguza hasara ya usambazaji kati ya Kilifi na Malindi, sehemu ambayo inahudumiwa na laini ya vol-ti za chini, utasababisha kuondolewa kwa gharama kubwa ya mafuta aina ya dizeli katika kituo cha Lamu, bandari ya Lamu pia itapata umeme wa kuendeleza operesheni zake pamoja na mradi wa barabara ya kuelekea Sudan ya Kusini na Ethiopia. Wengine ambao watanufaika ni pamoja na mra-di wa Kilimo cha unyunyuzaji maji wa shirika la Maendeleo ya Mto Tana, Kilimo cha nafaka, Kilimo cha miwa na pia wenye kufanya biashara ya utalii.

Laini ya kusambaza umeme ya Mzunguko wa Nairobi na Vituo Husika Vidogo

Mradi wa Mzunguko wa Nairobi unajumuisha ujenzi wa laini ya 100km yenye uwezo wa 400kV ikiwa na saketi mbili kutoka kituo cha umeme cha Suswa hadi kituo cha umeme cha Isinya na itaweza kusafirisha umeme wa kiwango cha 1300MW. Pia kutakuwa na ujenzi wa vituo vidogo vyenye uwezo wa 220kV katika sehemu ya Suswa, Ngong, Isinya, Athi River & Koma Rock pamoja na nyaya ya 3km yenye uwezo wa 220kV ambayo itapita chini ya ardhi kutoka kituo cha umeme cha Dandora hadi kile cha Koma Rock zikiwa na uwezo wa 230MW.

Mkandarasi wa laini ya kusambaza umeme ni Jyoti (India), na upande wa vituo vidogo akiwa ni Siemens (Ufaransa) pamoja na Iberdrola (Hispania). Washauri ni Power Engi-neers (Afrika Kusini) na KEMA (Uholanzi). Mradi umeanza na unatarajiwa kukamilika Septemba 2014. Unafadhiliwa na AFD- Euro 98.5 milioni (Kshs. 10.9 bilioni), EIB- Euro 17.8 milioni (Kshs. 2 bilioni) na Serikali ya Kenya- Kshs. 1.4 bil-ioni, kwa gharama ya jumla ya Kshs.14.3 bilioni. Sehemu ya ufadhili ya AFD- Euro 20 milioni, na EIB- Euro 17 milioni, ni pesa zilizosalia kutoka kwa mradi wa Mombasa-Nairobi.

Mradi wa Mzunguko wa Nairobi unawezesha kuwemo kwa njia zaidi ya mmoja mbadala ya kusambaza nguvu katika eneo la Nairobi na sehemu za karibu. Ongezeko katika kue-gemea ugavi wa umeme kisawa italeta mazingira mazuri kwa ajili ya uwekezaji na ukuaji katika mji mkuu na maeneo ya jirani. Laini ya Suswa - Isinya itakuwa kipande kikuu kati-ka uhamisho wa nguvu kutoka Ethiopia, Tanzania na Ugan-da.

Laini ya kusambaza umeme ya Olkaria-Les-sos-Kisumu (300 km 220/400kV)

Ujenzi wa laini ya 300km yenye uwezo wa 400/220kV ina-husisha ujenzi wa laini ya 400kV ya saketi mbili kutoka Olka-ria kuwezesha usafiri wa umeme wa nishati ya mvuke hadi Lessos. Laini ingine ya saketi mbili itajengwa kutoka kituo cha umeme cha uwezo wa 220kV cha Lessos hadi kituo cha umeme cha Kisumu kipya. Laini ya Lessos itakuwa na uwezo wa kusafirisha 1200MW hadi huku, na sehemu ya Kisumu itakuwa na uwezo wa kusafirisha umeme kiasi cha 500MW. Mradi huu unafadhiliwa na JICA- Yeni 12.4 bilioni

(Kshs. 10.5 bilioni) pamoja na Serikali ya Kenya- Kshs. 1.6 bilioni, kwa gharama ya jumla ya Kshs.12 bilioni. Unataraji-wa kukamilika mwaka wa 2016.

Sababu kuu ya mradi wa Olkaria-Lessos-Kisumu ni kuweze-sha kukuza umeme wa nishati ya mvuke na kusaidia kui-marisha uhusiano kati ya sehemu ya mashariki na magharibi ya Gridi ya Taifa. Mradi huu pia utakidhi kuongezeka kwa mahitaji ya umeme katika sehemu za Kaunti za mikoa ya Magharibi na zile za Kaskazini mwa Bonde la Ufa kutoka ki-tovu cha nishati cha Olkaria. Kadhaa kunauwezekano kuwa mradi huu utaimarisha viwanda vya Kilimo cha chai katika sehemu ya Nandi, miwa katika sehemu ya ukanda wa miwa (Miwani-Kibos), KARI- Kibos na vinginevyo.

II) Miradi ya Kusafirisha Umeme Kuto-ka Vituo Vya Kuzalisha Umeme

Miradi ifuatayo itawezesha usafirishaji wa umeme kutoka vituo vya kuzalisha umeme hadi sehemu za mahitaji ya umeme: -

Laini ya kusambaza umeme ya Loiyangala-ni-Suswa (430 km 400kV)

Ujenzi wa laini ya 430km yenye uwezo wa 400kV ya saketi mbili kutoka mradi wa Ziwa Turkana wa Upepo - Loiyangala-ni hadi kituo cha umeme cha Suswa utaanza mnamo 2013 na kukamilika mwaka 2015. Laini hii ina uwezo wa kusafiri-sha kipimo cha umeme cha 800MW na itatumika kusafiri-sha umeme kutoka mradi wa 300MW wa Ziwa Turkana wa Upepo – Loiyangalani. Inatarajiwa kuwa laini hii itatumika siku za usoni kusafirisha umeme kutoka kwa mashamba ya upepo na miradi ya mvuke yatarajiao kubuniwa sehemu za Bonde la Ufa na Kaskazini mwa Kenya (Marsabit).

Kituo cha umeme na laini ya Loiyangalani - Suswa zimefa-dhiliwa na Serikali ya Uhispania na Serikali ya Kenya kwa gharama ya jumla ya Kshs.18.3 bilioni, huku Uhispania wakifadhili Euro 110 milioni (Kshs. 12.1 bilioni) na Serika-li ya Kenya ikifadhili zilizobaki (Kshs. 6.2 bilioni). Sehemu ya laini inajengwa na Isolux Ingeniera ya Hispania kama mkandarasi, huku na ujenzi wa kituo cha umeme unae-ndeshwa na Siemens T & D. KEMA (Uholanzi) ni washauri wa uhandisi kwa mradi.

Laini za kusambaza umeme za Olkaria-Sus-wa 2X (25km 220kV)

Mradi wa Olkaria-Suswa unahusu ujenzi wa laini mbili za 25km zenye uwezo wa 220kV na saketi mbili, saketi moja kutoka kituo kipya cha uwezo wa 140MW cha kwanza cha Olkaria, na ya pili kutoka kituo kipya cha kuzalisha umeme cha uwezo wa 140MW cha nne cha Olkaria hadi kituo kido-go cha Suswa. Mradi huu unatarajiwa kukamilika mnamo


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Aprili 2014. Laini hizo zinauwezo wa pamoja wa 1000MW. Ni mradi unaofadhiliwa na EIB na Serikali ya Kenya kwa gharama ya Kshs. 0.9 billion. Mkandarasi wa laini ni KEC International kutoka India.

Laini ya kusambaza umeme ya Sangoro-Son-du (5 km 132kV)

Laini hii ni ya saketi moja na urefu wa 5km na uwezo wa 132kV. Inaweza kusafirisha (21.2 MW) kutoka kituo cha umeme cha Sangoro hadi kituo cha Sondu Miriu. Mradi huu ulikamilika Machi 2012 na ulifadhiliwa na JICA pamoja na Serikali ya Kenya kwa gharama ya Kshs.1.2 bilioni. Mradi huu ulitekelezwa kupitia KenGen.

III) Miradi ya Kuunganisha Nchi Jirani

Miradi hii inakusudia kuunganisha gridi za nchi jirani za Ken-ya kwa lengo ya kuweka utulivu wa umeme. Miradi hio ni:

Laini ya kusambaza umeme ya Lessos - Tororo (127 km 400kV Kuunganisha Ugan-da-Kenya)

Ujenzi wa laini hii ya 127km ya uwezo wa 400kV ya saketi mbili kutoka kituo cha umeme cha Lessos upande wa Ken-ya hadi Tororo nchini Uganda itaanza mnamo Aprili 2013 na inatarajiwa kukamilika Desemba 2014. Mradi huu unaweza kusafirisha umeme kipimo cha 1200MW. Mradi huu pia ni sehemu ya mradi wa kikanda wa Nile Equatorial Lakes Subsidiary Action Programme (NELSAP) unaoleta pamoja nchi za Kenya na Uganda, Rwanda, Burundi na sehemu ya Mashariki ya Congo. Mradi huu unafadhiliwa na AfDB- UA 39.77 milioni (Kshs. 5 bilioni) na Serikali ya Kenya- Kshs. 0.5 bilioni. Mshauri kwa ajili ya mradi ni RSW International (Aecom) kutoka Canada. Laini hii itawezesha usambazaji wa umeme bora kati ya Kenya na Uganda.

Laini ya kusambaza umeme ya Ethiopia-Ken-ya (612 km 500kV, HVDC Barabara ya Umeme ya Afrika Mashariki)

Mradi wa barabara ya umeme ya Afrika Mashariki unakus-udia kuunganisha gridi za umeme za Kenya na Ethiopia na utahusu ujenzi wa laini ya 612km yenye uwezo wa kusafiri-

Vifaa vya kushikanisha minara ya kusambaza umeme


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sha umeme kwa njia ya Bipolar moja kwa moja kutoka kwa vituo vya kubadilisha umeme Suswa hadi mwishoni mwa laini. Mradi huu utakuwa na uwezo wa kusafirisha 2000MW kati ya nchi hizo mbili. Mradi huo unatarajiwa kuanza mwezi Aprili 2014 na kukamilika Desemba 2017. Unafadhiliwa na Benki ya Dunia- Dola za Marekani 441 milioni (Kshs. 37.5), AfDB- Dola za Marekani 118 milioni (Kshs. 10 bilioni), AFD- Dola za Marekani 118 milioni (Kshs. 10 bilioni) na Serikali ya Kenya- Dola za Marekani 85 milioni (Kshs. 7.2 bilioni).

Itakapokamilika laini hii itaiwezesha Kenya kusambaza umeme kwa bei nafuu kutoka Ethiopia. Agano la kuuza na kununua umeme wa 400MW tayari upo kati ya nchi hizi. Mu-ungano wa mitandao iliyopangwa itaharakisha maendeleo ya rasilimali katika kanda za nishati hiyo itasaidia kuongeza na kustahimili mahitaji ya umeme na kupunguza gharama za umeme kwa nchi shiriki.

Nchi hizi mbili pia zitaweza kuimarisha na kuendeleza uku-zaji wa umeme kotokana na vyanzo vingi kama vile upepo, miali ya jua, mvuke na kadhalika. Pia, uwezekano wa kus-ambaza nishati ya ziada inayotokana kuboresha mazingira kutokana na kupunguzwa uzalishaji wa umeme wa kutumia mafuta ya petrol.

Laini ya kusambaza umeme ya Kenya-Tan-zania (93km 400kV)

Mradi huu ni sehemu ya Kenya - Tanzania - Zambia na utaun-ganisha mtandao wa nchi za Afrika Magharibi na mtandao wa nchini za Kusini Afrika kupitia ujenzi wa laini hii ya 400kV ya saketi mbili. Upembuzi yakinifu ya laini ya Isinya- Arusha - Singida ya 507km itakamilika mwaka wa 2012. Gharama ya upande wa Kenya inatarajiwa kuwa Kshs. 5 bilioni. Nchi zote mbili hivi sasa ziko katika pilkapilka za kutafute wafa-dhili.

IV) Miradi ya Umeme Kupenya Nchi

Miradi ya kikundi hiki iko kwenye mpango wa taifa wa En-ergy Access Scale-Up Programme na lengo lake kuu ni kuongeza upatikanaji wa umeme na kukabiliana na changa-moto ya kupenya na kusambaza umeme nchini kote. Miradi chini ya mpango huu ni kama ifuatavyo:

Kituo cha umeme cha Rang’ala cha onekana na rangi za kampuni ya KETRACO


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Laini ya kusambaza umeme ya Kilimambogo - Thika - Githambo na Thika - Gatundu (Nya-ga) (132kV)

Laini hizi mbili zinahusisha ujenzi wa 17km za 132kV sa-keti mbili kutoka makutano ya Kilimambogo hadi kituo cha umeme cha Thika (Mang’u), ikifuatiwa na sehemu ya 10km za saketi mbili kabla ya kupasuliwa na kuwa saketi moja ya 50km hadi Githambo kwa upande mmoja, na 20km upande mwingine hadi kituo cha umeme cha Gatundu. Kila laini ina weza kusafirisha 73MW. Miradi huo ni pamoja na ujenzi wa vituo vya umeme vya Thika, Githambo na Gatundu. Mira-di ya Kilimambogo-Thika, Thika- Gatundu na kituo kidogo kipya cha Mang’u, yalikamilika manamo Desemba, 2012 na huku upande wa Githambo ukitarajiwa kukamilika Juni 2013. Mradi huu unafadhiliwa na Benki Kuu ya KBC ya Ubel-giji - Euro 24 milioni (Kshs. 2.64 bilioni) pamoja na Serikali ya Kenya- Kshs. 0.8 bilioni. Mkandarasi ni CG Holding ya Ubelgiji.

Wakati utakamilika, mradi huu utahakikisha kwamba mji wa Thika, sehemu kubwa ya Kiambu na Kaunti ya Murang’a zitapata umeme thabiti na hivyo kuongeza kasi ya ukuaji katika sekta ya Viwanda na Kilimo.

Laini ya kusambaza umeme ya Nanyuki - Isi-olo - Meru (96km 132kV)

Ujenzi wa laini ya 96km yenye uwezo wa 132kV na saketi moja kutoka kituo cha umeme cha Nanyuki hadi cha Isiolo

na Meru unatarajiwa kukamilika mwezi Septemba mwaka 2014. Mradi huu pia unahusu ujenzi wa kituo cha umeme kipya Isiolo na upanuzi wa vituo vya umeme katika Nanyuki na Meru. Laini hii inaweza kusafirisha 73MW. Mradi unafa-dhiliwa na Benki ya KCB ya Ubelgiji- Euro 16 milioni (Kshs. 1.76 bilioni) na Serikali ya Kenya Kshs. 0.7 bilioni. Mkandar-asi kwa ajili ya mradi huu ni CG Holdings ya Ubelgiji.

Licha ya kutoa njia mbadala kwa ajili ya usambazaji wa umeme kutoka vituo viwili tofauti vya uzalishaji wa umeme kwa maji, laini hii itakuwa chanzo cha kuaminika wa us-ambazaji wa umeme katika jiji la Isiolo linalopangiwa kuwa na maendeleo kama mji wa mapumziko katika mradi wa kimataifa wa njia ya LAPSSET

Laini ya kusambaza umeme ya Mumias - Rang’ala (34km 132kV)

Mradi huu wa 34km na uwezo wa 132kV una saketi moja kutoka Mumias hadi Rang’ala, na una uwezo wa kusafiri-sha umeme kipimo cha 73MW, na ulikamilika Agosti, 2012. Mradi ambao pia ni pamoja na ujenzi wa kituo cha umeme cha Rang’ala na upanuzi wa kituo cha umeme cha Mumias ulifadhiliwa na Serikali ya Kenya kwa gharama ya Kshs. 1.2 Bilioni. Siaya na kaunti jirani zitanufaika pakuu kwa uwezo wa mradi huu kusambaza umeme.

Laini ya kusambaza umeme ya Kindaru-ma-Mwingi-Garissa (250km 132kV)

Huu ni moja wapo ya miradi tatu zinazofadhiliwa na Banki ya Dunia kwa gharama ya dola za Marekani 64 milioni (Kshs. 5.4 bilioni) katika mradi mkuu wa Kenya Electricity Expan-sion Programmeme (KEEP). Mradi huu utahusisha ujenzi wa laini ya 132kV ya saketi moja kutoka Kindaruma hadi Garissa kupitia Mwingi na vituo vya umeme vipya Mwingi na Garissa, na pia kazi ya upanuzi katika kituo cha umeme cha Kindaruma. Mradi huu una gharama ya Kshs. 3.4 bil-ioni. Mkataba wa ujenzi ulipatiwa Tata Project Ltd. (India) na upande wa vituo ukapewa KEC International Ltd (India). Mradi huu unatarajiwa kukamilika Machi 2014.

Licha ya kuboresha upatikanaji wa umeme kwenye maeneo mbalimbali kando ya njia ya laini hii, huu ndio mradi wa kwanza wa volti za juu sehemu za Mwingi na Garissa na utasaidia kwa kundoa viwanda vya kuzalisha umeme kwa mafuta aina ya dizeli. Pia utawezesha umeme unaozalishwa na miali ya jua, upepo na kuni katika sehemu ya Garissa kuweza kufikia Gridi ya Taifa na kutumika sehemu zingine za nchi.

Ujenzi wa minara katika mradi wa Mumias-Rang’ala


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Laini ya kusambaza umeme ya Eldoret-Kitale (60km 132kV)

Mradi huu wa KEEP unahusu ujenzi wa laini wa 60km kutoka Eldoret hadi Kitale wa 132kV na saketi moja, kituo kipya cha umeme Kitale na upanuzi wa kituo cha Eldoret. Mkataba wa ujenzi wa kituo cha umeme ulipatiwa M/S ABB Afrika Kusini (Pty) Ltd na upande wa laini ukatunukiwa KEC International (India). Mradi una gharama ya Kshs.1.4 bilioni na unataraji-wa kukamilika ifikapo Machi, 2014. Utainufaisha sana sekta ya kilimo katika sehemu hii ambayo inajulikana kama kikapu cha kitaifa cha nafaka.

Laini ya kusambaza umeme ya Kisii-Awendo (44km 132kV)

Mradi huu wa KEEP unahusu ujenzi wa laini ya 132kV ya saketi moja kutoka Kisii kuenda Awendo, kituo kipya cha umeme katika Awendo na kupanua kituo cha Kisii. Mkataba wa ujenzi wa vituo ulipatiwa M/S ABB Afrika Kusini (Pty) Ltd na ule wa laini ukapatiwa KEC International Ltd (India). Mra-di huu unatarajiwa kukamilika Machi 2014 na unatarajiwa kuwa na gharama ya Kshs.1.2 bilioni.

Zaidi ya kutoa nyongeza ya kuaminika ya umeme, pia mra-di huu utachangia katika kufaidisha sekta ya sukari na pia kupea umeme unaotarajiwa kuzalishwa katika kiwanda cha Sony Sugar.

Laini ya kusambaza umeme ya Lessos - Ka-barnet (65km 132kV)

Mradi huu wa urefu wa 65km unahusisha ujenzi wa laini ya 132kV yenye saketi moja kutoka Lessos hadi Kabarnet na kituo kipya cha 132/33kV katika Kabarnet, huku upanuzi wa kituo cha Lessos pia ulitekelezwa.

Laini ya kusambaza umeme ya Nanyuki - Nyahururu (79km 132kV)

Mradi huu unahusu ujenzi wa 79km za 132kV ukiwa saketi moja kutoka Nanyuki hadi Nyahururu (Rumuruti) na kituo kipya cha umeme cha 132/33kV sehemu ya Nyahururu, huku upanuzi ukifanyiwa kituo cha Nanyuki.

Laini ya kusambaza umeme ya Olkaria - Narok (68km 132kV)

Huu ni mradi wa 68km ukiwa na saketi moja kutoka Olkaria hadi Narok, pia unahusu ujenzi wa kituo kipya cha 132/33kV Narok na upanuzi wa kituo cha Olkaria.

Laini ya kusambaza umeme ya Sotik - Bomet (33km 132kV)

Laini hii ya 33km kutoka Sotik hadi Bomet inahusisha ujenzi wa saketi moja ya 132kV na kituo cha umeme cha 132/33kV Bomet na Sotik.

Laini ya kusambaza umeme ya Mwingi - Ki-tui - Wote - Sultan Hamud (153km 132kV)

Mradi huu unahusisha ujenzi wa laini ya saketi moja ya 132kV kutoka Mwingi kupitia Kitui, Wote hadi Sultan Hamud na ujenzi wa vituo vya umeme vipya za 132/33kV Kitui, Wote na Sultan Hamud, na upanuzi wa kile cha Mwingi.

Laini ya kusambaza umeme ya Ishiara - Kieni (3km 132kV)

Laini hii ya usambazaji umeme ina husisha ujenzi wa 33km za 132kV kutoka Ishiara hadi Kieni, pamoja na kituo cha umeme cha 132/33kV hapo Kieni na mashine ya kubadili-sha njia ya umeme hapo Ishiara.

v) Miradi ya Ziada

KETRACO imebainisha miradi ya ziada ili kuboresha ueneza-ji wa umeme na kuimarisha mtandao wa usambazaji. Ka-tika suala hili, upembuzi yakinifu umekamilika na vyeti vya ununuzi rasimu vinatayarishwa kwa ajili ya miradi ifuatayo, ambayo imefadhiliwa na Benki ya Exim ya India.

Laini ya kusambaza umeme ya Turkwel - Or-tum - Kitale (90km 220kV)

Mradi huu ni wa saketi moja kutoka kiwanda cha uzalishaji umeme cha Turkwel hadi Ortum na Kitale; utaweza kubeba 250MW. Mradi huu unahusisha ujenzi wa kituo cha umeme kipya cha Ortum na vile vya Kitale na Turkwel vitapanuliwa.

Mradi huu utawezesha Kitale kupata njia mbadala na itachangia pia kusambaza umeme kwenye viwanda vya saruji vinavyotarajiwa sehemu ya Ortum.

Laini ya kusambaza umeme ya Machakos - Konza - Kajiado - Namanga (153km 132kV)

Huu ni mradi wa 153km wenye uwezo wa 132kV ya saketi moja. Utatoka Machakos kwenda Konza, Kajiado na Naman-ga; na unauwezo wa kusafirisha umeme kiasi cha 73MW. Mradi huu pia utahusu ujenzi wa vituo vinne vya umeme vipya katika Machakos, Konza, Kajiado na Namanga.

Mradi huu utaimarisha gridi iliyopo kwa wakati huu na pia kuongezea upatikanaji wa umeme katika sehemu ya Macha-kos, Konza, Kajiado na Namanga na sehemu jirani. Uenezaji


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thabiti wa umeme pia utachangia ukuaji wa haraka wa vi-wanda kama vile vya nyama na mifugo sehemu ya Kajiado. Mji wa teknologia wa Konza pia utafaidika na mradi huu.

Kwa jumla laini za kusambaza umeme za urefu wa 243km na vituo vya umeme vitafadhiliwa na India Exim Bank pamo-ja na Serikali ya Kenya kwa gharama ya jumla ya Kshs.6.8 bilioni. India Exim Bank watatoa dola 62 milioni. Miradi hii inatarajiwa kuwa imekamilika Machi 2015.

Benki ya Ubelgiji -KBC na Serikali ya Kenya zitafadhili mradi wa Sondu - Homa Bay - Awendo ambao ni wa urefu wa 90km na wenye uwezo wa 132kV na saketi moja. Unatoa umeme kwenye kiwanda cha uzalishaji wa umeme cha Son-du hadi Homa Bay na Kitale. Laini hii inauwezo wa 72MW na utahusisha ujenzi wa kituo kimoja cha umeme cha Homa Bay na upanuzi wa vituo vya Sondu na Awendo. Mkandarasi wa mradi huu ni CG Holdings ya Ubelgiji na mradi unatara-jiwa kukamilika mwaka 2016. Inakadiriwa utagharimu Kshs. 2.1 bilioni.

Inatarajiwa kuwa ukamilikapo utaimarisha mtandao ulioko sehemu hio na pia utachangia ukuzaji wa sekta ya samaki.

vi) Miradi Inayohitaji Ufadhili

KETRACO imebainisha laini za kusambaza umeme na hadi wakati huu miradi hii inahitaji fedha au haijapata wafadhili wowote. Baadhi ya laini hizo ni zile zenye lengo la kuimari-sha mitandao ya usambazaji katika Maua, Maralal, Migori/ Isabenia, Lunga Lunga na Chogoria. Zingine zitawezesha vituo vya pekee kama vile Hola, Bura, Habaswen na Wajir viweze kujiunga kwenye Gridi ya Taifa na kuongeza upati-kanaji wa umeme kwa lengo la kuimarisha maendeleo katika sehemu za nyanjani. Miradi hio ni pamoja na ifuatayo:

a) Laini ya Meru - Maua; Yenye urefu wa 50km na uwezo wa 132kV. Ina saketi moja na itasafirisha 73MW. Itahusisha ujenzi wa kituo kipya cha umeme cha Maua na upanuzi wa kituo cha Meru. Gharama ya jumla ya mradi huu pamoja na ya njia ya haki ni Kshs. 1.3 bilioni. Laini hii itafaidi sekta ya kilimo kwa ujumla.

b) Laini ya Nyahururu - Maralal; Ni ya 148km 132kV ya saketi moja na uwezo wa 73 MW na itahusisha ujenzi wa kituo kipya cha Maralal na upanuzi wak-ile cha Nyahururu. Gharama jumla ya ujenzi wa laini na ghar-ama ya njia ya haki inakadiriwa kuwa Kshs. 2.0 bilioni. Wa-takaofaidika ni pamoja na wamiliki wakubwa wa mashamba ya mifugo na pia viwanda vya uzalishaji wa umeme kwa njia ya miale ya jua wanaotarajiwa katika sehemu ya mararal.

c) Laini ya Awendo - Migori / Isabenia;Ni ya 50km 132kV ya saketi moja yenye uwezo wa 73MW na utahusisha ujenzi wa kituo kipya cha umeme cha Mig-ori/ Isabenia na upanuzi wa kituo cha Awendo. Gharama ya jumla ya ujenzi na gharama ya njia ya haki inakadiriwa kuwa

Kshs. 1.5 bilioni. Mradi huu utachangia ukuaji wa sekta ya sukari na pia kutoa nafasi kwa biashara ya umeme ya Kikan-da na sehemu za kaskazini mwa Tanzania

d) Laini ya Garsen - Hola - Bura - Garissa; Ni ya 240km 220kV ya saketi moja na yenye uwezo wa 250MW. Itahusisha ujenzi wa vituo viwili vya umeme Hola na Bura na upanuzi wa vituo vya umeme vya Garsen na Garissa. Jumla ya gharama ya ujenzi wa laini na njia ya haki unakadiriwa kuwa Kshs. 9 bilioni. Laini hii itapita sam-bamba na Mto Tana na hivyo kufungua maeneo kwa ajili ya unyunyuziaji maji mimea, viwanda vya bidhaa za kilimo na kuhifadhi uthabiti wa umeme.

e) Laini ya Galu - Lunga Lunga;

Ni ya 60km 132kV ya saketi moja na yenye uwezo wa 73MW. Itahusisha ujenzi wa kituo cha umeme sehemu ya Lunga Lunga na upanuzi wa kituo cha Galu. Jumla ya ghar-ama ya ujenzi na njia ya haki unakadiriwa kuwa Kshs. 1.6 bilioni. Watakaofaidika sana na mradi huu ni sekta ya mad-ini, sekta ya sukari, sekta ya korosho na pia kutoa nafasi kwa biashara ya umeme ya Kikanda na sehemu za kaskazini mwa Tanzania

f) Laini ya Ishiara - Chogoria;Ni ya 40km 132kV ya saketi moja na yenye uwezo wa 73MW. Itahusisha ujenzi kituo kipya katika Chogoria na upanuzi wa kile cha Ishiara. Jumla ya gharama ya ujenzi na pia njia ya haki inakadiriwa kuwa Kshs. 1.6 bilioni. Mradi huu utawafaidi wakulima.

g) Laini ya Garissa - Habaswen - Wajir; Ni ya 330km 220kV ya saketi moja na yenye uwezo wa 250MW. Itahusisha ujenzi wa vituo viwili vipya sehemu ya Wajir na Habaswen na upanuzi wa kituo cha Garissa. Ghar-ama kwa jumla inakadiriwa kuwa Kshs. 9.5 bilioni. Inataraji-wa kuwa usambazaji wa umeme utaimarika sehemu hizo na pia ukuaji wa haraka sekta ya viwanda vya nyama za mifugo katika Kaunti za Garissa na Wajir.

vii) Miradi Inayo Pangiwa Upembuzi Yakinifu Mwaka 2013 (Kulingana na HE)

KETRACO inafanya upembuzi yakinifu kushughulikia sehemu za Gridi ya Taifa zilizo na udhaifu ili kuboresha upenyaji wa umeme katika maeneo mbalimbali ya nchi. Laini hizi ni:

Laini ya kusambaza umeme ya Isinya - Kon-za (38km 400kV)

Ni ya 400kV, saketi mbili na itaunganisha mji wa teknologia wa Konza kwenya Gridi ya Taifa na hasa vituo vya uzalishaji umeme vya Olkaria, Menengai na Ethiopia kupitia laini ya


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Suswa – Isinya. Pia laini hii itaunganisha sehemu hii na vituo vya uzalishaji umeme vya Mombasa na kaskazini mwa Tanzania kupitia kituo cha Isinya. Pia inatarajiwa licha ya kutoa njia mbadala kwa ajili ya usambazaji wa umeme, laini hii inahakikishia umeme wa kutosha kwa mji wa Konza kwa zaidi ya miaka 20.

Laini ya kusambaza umeme ya Longonot - Thika - Kangundo - Konza (205km 400kV)

Ni ya 205km 400kV za saketi mbili na ni sehemu ya kuka-milisha ule mradi wa 400kV Mzunguko wa Nairobi kwa vile sasa utaunganisha sehemu ya kaskazini ya mradi huo kuanzia kituo cha umeme cha Suswa (Longonot), ukipitia nje kidogo ya kaskazini mwa Nairobi na kumalizikia Konza. Laini hii itaungana na kiungo cha kusini cha mradi wa Mzu-nguko wa Nairobi kupitia Konza - Isinya - Suswa. Zaidi ya kuimarisha Gridi ya Taifa pia utatoa hakikisho la kuaminika la usalama ama N-1.

Laini ya kusambaza umeme ya Kisumu - Kakamega - Musaga (70km 220kV)

Ni ya 220kV za saketi mbili na itahakikisha kwamba sehemu za Kakamega na Musaga zitapata njia mbadala ya kuaminika huku pia ikisaidia laini ya 132kV kutoka Lessos na Tororo.

Laini ya kusambaza umeme ya Mzunguko wa Ziwa Victoria (235km 220kV)

Mzunguko wa Ziwa Victoria ni wa 220kV na utawezesha umeme kusambazwa na kuunganisha miji ya Kenya kuzun-guka Ziwa Victoria hadi Musoma, Mwanza, Bukoba upande wa Tanzania na Masaka, Kampala na Jinja nchini Uganda. Laini hii pia itatoa fursa kwa kibiashara ya umeme kuende-lezwa katika kanda ya Afrika Mashariki.

Laini ya kusambaza umeme ya Kiambere - Maua - Isiolo (288km 220kV)

Chini ya mpango wa LAPSSET mji wa Isiolo umebainishwa kuwa wa maendeleo ya kitalii na mapumziko ya kimataifa. Ni laini ya 220kV kutoka kiwanda cha uzalishaji umeme cha Kiambere hadi Isiolo. Mradi huu utahakikisha na kukidhi haja za nishati za mji wa Isiolo.

Laini ya kusambaza umeme ya Isiolo - Maralal (152km 220kV)

Laini hii itatumika kama njia mbadala ya kusafirisha umeme utakao zalishwa na viwanda vya upepo, nishati ya jua na maeneo ya mvuke katika sehemu za katikati ya bonde la Ufa hadi kwa Gridi ya Taifa.

Laini ya kusambaza umeme ya Isiolo - Mars-abit (306km 220kV)Laini ya kusambaza umeme ya Loiyangalani – Marsabit (188km 400kV)

Miradi hii miwili itasaidia katika kuimarisha uwezo kamili wa upepo katika sehemu za kaskazini mwa Kenya kwa kuun-ganisha maeneo yenye wingi wa upepo na Gridi ya Taifa.

Mradi wa upanuzi wa Usambazaji Umeme Kenya (Kenya Electricity Transmission Ex-pansion Programmeme)

Ili kuongeza upatikanaji wa umeme na kukabiliana na changamoto ya kupenya nchi na kuunganishwa sehemu za mashinani, laini zenye urefu wa 900km zimependekezwa kama ifuatavyo;

Laini ya kusambaza umeme ya Ngong- Magadi (84km 132kV)

Laini ya kusambaza umeme ya Webuye - Kimilili - Kitale (73km 132kV)

Laini ya kusambaza umeme ya Kakamega - Kaimosi (25km 132kV)

Laini ya kusambaza umeme ya Myanga - Busia (41km 132kV)

Laini ya kusambaza umeme ya Rang’ala - Bondo - Ndigwa (70km 132kV)

Laini ya kusambaza umeme ya Homa Bay - Sindo (73km 132kV)

Kibao cha kutangaza kituo cha umeme cha Isinya


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Laini ya kusambaza umeme ya Ndhiwa - Karungu (74km 132kV)

Laini ya kusambaza umeme ya Sotik - Kilgoris (48km 132kV)

Laini ya kusambaza umeme ya Kitui – Mutomo - Kibwezi (144km 132kV)

Laini ya kusambaza umeme ya Uplands - Limuru (40km 132kV)

Laini ya kusambaza umeme ya Turkwel - Lodwar - Lokicho-gio (228km 132kV)

MAFANIKIO MENGINE

Nafurahi kutoa taarifa kwamba Kampuni imepata matokeo ya kuridhisha katika nyanja nyingi kwa kupitia juhudi zetu katika kutekeleza Mikakati ya kampuni. Katika kipindi hiki, Wasimamizi wa KETRACO waliendelea kuimarisha mifumo, sera, miundo na michakato ili kulainisha mikakati yake ya ukuaji wa uchumi. Mafanikio muhimu yamepatikana katika baadhi ya hizi kama ilivyo onyeshwa hapa chini.

Wafanyakazi

Kwa kutambua kwamba wafanyakazi wema ni muhimu kwa utendaji kazi, Kampuni inajitahidi ili kuhakikisha kuwa kila mfanyakazi amepewa jukumu kulingana na uwezo au ujuzi wake. Ili kuimarisha wafanyikazi zaidi, Kampuni iliajiri mshauri ili achambue mafunzo yanayo hitajika siku za uso-ni. Taarifa ya mashauri imependekeza mpango wa miaka mitatu wa mafunzo ambayo yataziba pengo zote za ujuzi na kuimarisha uwezo wa kila mfanyakazi.

Kuna mpango tayari unatekelezwa kwa njia zote mbili ume-boreshwa na mafunzo ya kipeke yanayopatikana ndani ya nchi na ng’ambo. Aidha, zoezi tathmini ya kazi limekamilika na ripoti ya mwisho ya mapendekezo sasa inatekelezwa. Tathmini ya kazi zoezi imewezesha KETRACO kulainisha wafanyakazi wake na malengo yake na kuimarisha ufanisi wa ndani na usawa ndani ya jamaa na thamani ya kazi. KETRACO inaamini kwamba ufanisi wa ajira na mafunzo ya kuendelea ni muhimu kwa mafanikio yake. Katika mwaka unaochunguzwa, wafanyakazi 21 wa ziada waliajiriwa ili wa-fanyakazi wote wawe 128 wakati wa kufunga mwaka.

Kipindi cha ustawi wa wafanyakazi kiliendelea upya kuhakik-isha kwamba KETRACO bado ina ushindani wa kuajiri kote sokini. Utafiti wa kupima kama wafanyakazi wameridhika uliofanywa mwishoni mwa mwaka ulionyesha kwamba wa-fanyakazi waridhika vilivyo hadi 79% ikilinganiswa na 77% mwaka uliopita.

Ili kuhakikisha utofauti na sera za jinsia wafanyakazi wali-

hamasishwa vilivyo kupitia njia ya warsha. Maswala ya usa-wa na kijinsia yaliimarishwa wakati ajira kwa uwiano wa ki-jinsia ilikuwa 33%. Aidha, mpango wa kuhusisha walemavu kazini pia ulitekelezwa na wafanyakazi kuhimizwa kupitia warsha za kuwafahamisha na kuhamasishwa.

Uendeshaji kupitia Ufundi mitambo

Kampuni ina nia ya kuendelea kuwekeza katika mbinu za miundombinu ya ubora wa mitambo yetu ya teknologia na mawasialiano (ICT) ili kuimarisha shughuli zetu za utoaji wa huduma. Kufikia lengo hili, laini zetu zote za kusambaza umeme zinaundwa zikichanganya pia uwezekano wakubeba nyuzi aina ya fibre (Optical Ground Wire -OPGW) ili kuweze-sha matumizi ya mawasilaino ya kindani aina ya Supervi-sory Control & Data Acquisition and Energy Management System (SCADA / EMS).Nyuzi aina ya fibre ambazo kampuni haitaweza kutumia zitaweza kukombolesha kwa kampuni za tovuti nchini.

Usimamizi wa Utendaji

KETRACO kama shirika tunaamini na kupendekeza kwamba ni muhimu kipimo cha juhudi na utenakazi wetu kiwe cha juu. Kwa hivyo usimamizi wa utendaji ni muhimu kwa utam-buzi wa malengo ya kampuni na ili yaweze kulainishwa na kazi katika vitengo vyote vya kampuni.

Mkataba wa tatu wa Utendaji kwa kipindi 2011/2012 uli-sahihishwa kati ya Bodi na Serikali. Nafurahi kutoa taarifa kwamba wakati wa tathmini ya mwaka ya 2011/12, utendaji wa Kampuni yetu uliweza kupewa matokeo ya kiwango cha “nzuri sana”.

Cheti cha ISO

Kampuni imepata mafanikio makubwa katika kufikia karibu na kupata cheti cha ISO katika mwaka unaoangaziwa. Mwa-ka huu ndio tuliweza kuzindua utekelezaji wa Mfumo wa ISO au Quality Management.Utafiti wa kupima kama wateja wetu wameridhika na hudu-ma zetu ulifanyika mwishoni mwa mwaka na ukaonyesha kwamba kipimo cha kuridhika kiliongezeka kutoka 71.90% hadi 74.8% wakati wa mwaka huo.

Mbinu mpya za utoaji Huduma

Kampuni ilianzisha utoaji wa huduma wa mbinu mpya kupi-tia mfumo wa habari za kijiografia (GIS) uiitwayo ArcGIS. Mpango huu ulitekelezwa kwa ajili ya uchambuzi wa habari za angani na utafiti yaani (LiDAR), na mbinu zinginezo za kuwezesha habari za usorovea kuimarisha kazi ka uchoraji


44

wa laini za kusambaza umeme kujengwa kwa haraka na kwa gharama ya chini.

Maswala ya kijamii

KETRACO, kama mashirika mengine, inawajibika kuhakiki-sha kwamba miradi yote inatekelezwa kwa njia ambazo zi-nawahusisha jamii zinazoathirika kwa njia ya kuzungumza nao katika maeneo ya miradi yote.

Kampuni imewezesha kuweko kwa mkataba wenye maele-zo na majukumu yanayofuatwa kikamilifu katika shughuli zote zakuhusu maswala ya kijamii.

KETRACO huhakikisha kwamba miradi yote inatekelezwa kupitia mchakato wa mashauriano na wadau. Kampuni, zai-di huhakikisha kwamba shughuli zake zinafanywa kuzingatia mazoea bora kwa kuzingatia kwamba ujenzi wa laini za us-ambazaji umeme zinaweza kudhuru mazingira na mahitaji ya ardhi kwa ajili ya vituo vya umeme na njia ya haki vinalazimu wadau wengine wauze mashamba yao.

Shukrani

Ningependa kuwashukuru wadau, ikiwa ni pamoja na Seri-kali yetu, washirika wa maendeleo au wafadhili, washauri, wakandarasi, jamii zinazohusishwa na miradi yetu na hasa wafanyakazi, kwa ushirikiano na msaada wao wakati wa mwaka 2011/2012. Hatungewaza kupata mafanikio tuli-yoangazia kwa ripoti hii kama sio kwa ushirika wenu.

Tunatarajia mwaka ujao utakuwa wa matumaini mema huku pia miradi mbalimbali inayondelea kutekelezwa ikikamilika na kuthibitisha na kufikia lengo letu la kuboresha mtandao wa usambazaji wa umeme kote nchini.

Mhandisi Joel KiiluMkurugenzi MkuuDesemba 19, 2012

Mara kwa mara miradi ya usambazaji wa umeme huvamiwa na makazi au uharibifu wa vyuma

Mkurugenzi mkuu pamoja na kamishina wa Kaunti ya Lamu wakikutana na washikadau wakati wa safari ya kukagua mradi wa Rabai-Malindi-Garsen-Lamu


45

Jumba la Capitol Hill Square- Makao makuu ya kampuni ya KETRACO

Majaribio aina ya Uplift Test yakifanywa kudhibiti ubora wa mradi wa Mombasa-Nairobi


46

KETRACO staff in a sub-station


47

approval of the annual budgets for the financial performance of the Company; monitoring performance periodically; man-aging risks by ensuring that the Company has implemented adequate systems of internal controls together with appro-priate monitoring of compliance activities; and working with management to realise mandate of the Company.

There are deliberate measures and plans in place for all Directors to receive appropriate training and to take inde-pendent professional advice if necessary. New directors are also well inducted by provision of necessary information pertinent to the Company’s business, meetings with Man-agement and training. In this regard, Directors were trained on good corporate governance by the Centre for Corporate Governance during the first six months of incorporation of the Company to ensure that they start on a sure footing by enhancing their skills. The Board also attended a workshop on procurement conducted by the Public Procurement Over-sight Authority.

Diversity in Board and Gender Balance:

There is a diverse mix of skills, age and gender in the board, as is shown from the profile of directors elsewhere in this Report which outlines their professional qualifications and experience. Both gender are well represented with four fe-male directors and five male constituting the board of nine.

It behoved the Board sitting regularly during the set-up phase of the Company to put in place structures and recruit appropriate staff to commence business. The Board met in accordance with requirements of the business. The Board held a total of 14 meetings during the year, which were very well attended. Members who were absent in each of the meetings and meetings of the committees had informed the company secretary in advance and their apologies reported and recorded accordingly.

Corporate governance is the process and structure used to direct and manage the business affairs of the Company towards enhancing prosperity and corporate accountability with the ultimate objective

of realising shareholders’ long term value while taking into account the interest of other stakeholders. The Directors are responsible for the corporate governance practices of the Company. This Statement sets out the main practices in operation during the year under review.

Board of DirectorsThe Board of Directors has nine members comprising the Managing Director and eight non-executive directors, in-cluding the Chairman. Although incorporated under the Companies Act, Cap 486, the Company is governed under the provisions of State Corporations Act, Cap 446 by virtue of the Company being wholly owned by the Government. The non-executive directors are independent within the meaning of the Capital Markets Authority’s Guidelines on Corporate Governance. Information on directors’ profiles is shown on page on page 6 and 7.

The Chairman and the Managing Director play separate roles in the governance structure of the Company. The Chairman is primarily responsible for the running of the Board and ensuring that it is supplied in a timely manner with sufficient information to enable it to discharge its duties. The Man-aging Director is responsible for recommending business plans and the budget to the Board, implementing approved corporate strategies and day to day administration of the Company.

The primary responsibilities of the Board include: defining the vision and mission statements of the Company elucidat-ed in a corporate strategic plan which defines and sets the strategic objectives and goals for the Company; establish-ment of short and long term goals and ensuring preparation of interim and the annual financial statements; review and

CORPORATE GOVERNANCE STATEMENT

Galu Sub-station


48

NAME ATTENDANCE

1. Mr. Justus Kageenu 14

2. Mr. Patr ick Nyoike, PS, MOE 3

3. Eng. Joel Ki i lu 14

4. Mr. Daniel K. Mwaura 14

5. Mrs. Fel ister Kivis i (Al ternate Director to Mr. Joseph Kinyua, PS, Treasury) 14

6. Eng. Jul ius Mwathani (Al ternate Director to Mr. Patr ick Nyoike, PS, MOE) 11

7. Mrs. El izabeth W.Maina- (Appointed 10.2.2012) 6

8. Ms. Esther N. M’ithiria- (Appointed 10.2.2012) 6

9. Mrs. Pat ience K. Nyaoga- (Appointed10.2.2012) 6

10. Hon. Jafaar Sheikh (Ceased 18.12.2012) 14

11. Mr. Domiciano Maingi- (Ceased 15.1.2012) 7

12. Hon. Jimmy Angwenyi- (Ceased 15.1.2012) 6

13. Rev. Jessie Mutura- (Ceased 15.1.2012) 5

The fol lowing Board Committees were in place during the per iod under review year:-

Audit & Risk Committee

The Audit & Risk Committee was reconst i tuted in June, 2012 and is in l ine with Treasury Circular No. 16/2005 on establ ishment and operat ional izat ion of audit committees in the Publ ic Service. The Com-mittee comprised four non-execut ive directors and is chaired by a non-execut ive director. The members of the Committee dur ing the per iod under review were:

1. Hon. Jafaar Mohammed (Chairman) -Ceased 18.12.20122. Mrs. Felister Kivisi 3. Ms. Esther Nkatha 4. Mr. Daniel Mwaura5. Mr. Domiciano Maingi - Ceased15.1.20126. Hon. Jimmy Angwenyi - Ceased 15.1.20127. Rev. Jessie Mutura - Ceased 15.1.2012

BOARD COMMITTEES

ATTENDANCE OF BOARD MEETINGS

ATTENDANCE OF AUDIT & RISK COMMITTEE

NAME ATTENDANCE

1. Hon. Jafaar Mohammed- Chairman (Ceased 18.12.2012) 3


3. Ms. Esther Nkatha 2

4. Mrs. Fel ister Kivis i 3

5. Rev. Jessie Mutura- (Ceased 15.1.2012) 1

6. Mr. Domiciano Maingi- (Ceased 15.1.2012) 2


49

The Audit & Risk Committee held 3 meetings during the period and were well attended.

The Committee routinely invites the Managing Director, and at times the other key staff to attend the meetings. The Head of Internal Audit is the Secretary to the Committee.

Staff and Remuneration Committee

The Board constituted a Staff & Remuneration Committee whose mandate includes determining the terms and conditions of service of staff and approval of recommendations for appointment and disciplinary issues of senior staff.

The members who served in the Committee were as follows:

1. Mrs. Elizabeth W. Maina (Chairperson)2. Eng. Julius Mwathani (Alternate Director to Mr. Patrick Nyoike, PS, MOE)3. Mr. Daniel K. Mwaura4. Mrs. Patience Nyaoga5. Eng. Joel Kiilu

When appropriate, the Committee invites other members of the Board and staff to its meetings.

The Committee held 4 meetings during the period under review.

ATTENDANCE OF STAFF & REMUNERATION COMMITTEE

NAME ATTENDANCE

1. Mrs. El izabeth W. Maina-(Appointed 10.2.2012) 1

2. Hon. Jimmy Ang’wenyi- (Ceased 15.1.2012) 3

3. Mrs. Pat ience Nyaoga-(Appointed 10.2.2012) 1

4. Eng. Jul ius Mwathani 4

6. Eng. Joel Kiilu 4

7. Mr. Domiciano Maingi (Ceased 15.1.2012) 3

8. Rev. Jessie Mutura (Ceased 15.1.2012) 3

Adhoc Board Committee on Ethiopia-Kenya Inter-connector

The Board on 30th June, 2009 constituted an Adhoc Committee on the Ethiopia- Kenya Interconnector arising from concerns raised on the impact of GIBE III dam on Lake Turkana. The mandate of the Adhoc Committee of the Board was to engage the stakeholders, monitor and address issues impacting on the project and make recommendations to the Board with a view to ensure that the project succeeds. Members of the Committee include:

1. Hon. Jimmy Ang’wenyi - Chairman (Ceased 15.1.2012) 2. Hon. Jafaar Mohammed (Ceased 18.12.2012) 3. Mr. Daniel K. Mwaura

The Adhoc Committee, having visited the shores of Lake Turkana on the Lodwar side the previous year also visited Loiyan-galani on the Eastern shores of the Lake to engage with the local communities with a view to get first-hand information on their concerns. The Committee routinely invites management staff with relevant expertise to its meetings.


50 50

NAME ATTENDANCE

1. Mr. Justus Kageenu 4

2. Eng. Joel Ki i lu 4

3. Rev. (Dr). Jessie Mutura (Ceased 15.1.2012) 4

4. Ms. Esther Nkatha (Appointed 10.2.2012) 0

ATTENDANCE OF PERFORMANCE CONTRACTING COMMITTEE

The committee held a total of 4 meetings during the year.

ATTENDANCE OF AD HOC COMMITTEE

NAME ATTENDANCE

1. Hon. Jimmy Ang’wenyi 3


3. Hon. Jafaar Sheikh 4

Performance Contracting Committee

The Performance Contracting Committee was constituted on 27th July, 2009 to spearhead the negotiations with the Gov-ernment on Performance Contracting. The Company signed Performance Contracts with the Government for the period and 2010/2011 and 2011/2012Members constituting the Committee are:-

1. Mr. Justus Kageenu- Chairman2. Rev (Dr) Jessie Mutura- (Ceased 15.1.2012)3. Ms. Esther Nkatha (Appointed 10.02.12)4. Eng. Joel Kiilu

The Committee held a total of 4 meetings during the period under review.


51

Open forums are also organised with development partners and other stakeholders to discuss progress of on-going and planned projects.

MAJOR STAKEHOLDERS

In the course of doing business, the Company takes cogni-zance and fully engages with the following major stakehold-ers: the Government of Kenya through the Ministry of Energy and Treasury; Funding and Development partners including the World Bank; African Development Bank (AfDB); AFD; European Investment Bank (EIB); JICA; Exim Bank of Chi-na; Kreditanstalt für Wiederaufbau (KfW) and recently EXIM Bank of India. Others include the Kenya Power; Kenya Ener-gy Generating Company Limited (KenGen); Geothermal De-velopment Company (GDC); Rural Electrification Authority, (REA) Energy Regulatory Commission (ERC); Independent Power Producers and other electricity sub-sector players.

JUSTUS G. KAGEENUCHAIRMAN19th December 2012

Details of Directors’ remuneration are set out in the report on page 63.There were no directors’ loans at any time during the year.

INTERNAL CONTROLS

The Company has systems and processes to ensure req-uisite internal controls, physical security of assets and re-porting of accurate and up to-date information. Whereas the Board has overall responsibility for the systems of internal control which are fully embedded in the operations of the Company, certain responsibilities, such as review of the effectiveness of the internal control systems are delegat-ed to the Audit and Risk Committee of the Board. Internal controls comprise of methods and procedures adopted by Management to provide reasonable assurance in safeguard-ing assets, prevention and detection of errors, accuracy and completeness of accounting records together with reliability of financial statements.

An integrated Enterprise Resource Planning system is also under consideration to replace the interim IT software ac-counting system which is in place.

ACCOUNTABILITY AND AUDIT

Directors’ responsibilities in relation to financial statements:The Company law requires the Directors to prepare finan-cial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the company for that period. The Directors are responsible for ensuring that suitable accounting policies are consistently applied, supported by reasonable and prudent judgements and estimates and those applicable accounting standards are followed.The Directors have the responsibility for ensuring that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act and the State Corporations Act. They also have general responsibility for the systems of internal control for safeguarding the assets of the Company and to prevent and detect fraud and other irregularities.

COMMUNICATION WITH STAKEHOLDERS

The Company places a great deal of importance on open communication with its stakeholders. This is achieved through press releases, updates posted on the Company website www.ketraco.co.ke, and circulation of audited fi-nancial statements on an annual basis. Shareholders also have an opportunity to dialogue with the Board of Direc-tors and Management during the annual general meetings.

DIRECTORS’ REMUNERATION

Isolaters in a Sub-station


52

The Directors submited their report together with the audited financial statements for the year ended 30th June 2012 which show the state of affairs of the Company.

Principal Activities

The core business of the Company is to plan, design, con-struct, operate and maintain new high voltage (132kV and above) electricity transmission infrastructure that will form the backbone of the National Transmission Grid, build inter-connectors to facilitate regional power trade, and to wheel electricity to the Kenya Power and other end users from generators who produce power in bulk.

Results

The operating results of the Company for the year under review are shown on page 53.

Dividends

The Board of Directors do not recommend payment of a dividend for the period under review.

Capital Expenditure

As at 30th June, 2012, the net book value of the transmis-sion infrastructure amounted to Kshs.4,988, million. Grants from development partners amounted to KShs.12,223 mil-

lion while exchequer funding for development expenditure was KShs.11,156 million. Net capital work-in-progress amounted to Kshs 16,354 million compared to KShs.5,666 million in 2011/2012

Directors

The members who served in the Board of Directors during the year are shown on page 2.

Auditors

The Auditor General is responsible for carrying out the stat-utory audit of the Company’s books of account in accord-ance with the State Corporations Act, Cap 446, Section 14 (3) and Section 39 of the Public Audit Act, 2003. Section 39 (1) of the Public Audit Act empowers the Auditor General to appoint other auditors to carry out audit on his behalf. Ac-cordingly, Deloitte and Touche were appointed to carry out the audit for the year ended 30th June, 2012.

By Order of the Board

Duncan K. MachariaCompany Secretary19th December 2012

REPORT OF THE DIRECTORS


53

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Companies Act Cap 486 requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year

and of the operating results of the Company for that year. It also requires the directors to ensure the Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Company. They are also responsible for safeguarding the assets of the Com-pany.

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the requirements of the Kenyan Companies Act, and for such internal controls as directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

The directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with International Financial Reporting Standards and in the manner required by the Kenyan Companies Act, Cap 486. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Compa-ny and of its operating results. The directors further accept responsibility for the maintenance of accounting records

which may be relied upon in the preparation of financial statements, as well as adequate systems of internal finan-cial control.

Nothing has come to the attention of the Directors to in-dicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

Signed for and on behalf of the Board by:-

MR. JUSTUS G. KAGEENU– CHAIRMAN

ENG. JOEL M. KIILU –MD


54

REPORT ON THE FINANCIAL STATEMENTSThe accompanying financial statements of Kenya Electricity Transmission Company Limited set out on pages 53 to 77, which comprise the statement of financial position as at 30 June 2012, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information have been audited on my behalf by Deloitte and Touche, auditors appointed under Section 39 of the Public Audit Act, 2003. The auditors have duly reported to me the results of their audit. And on the basis of their report, I am satisfied that all the information and explanations which to the best of my knowledge and belief, were necessary for the purpose of the audit were obtained.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Inter-national Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.The management is also responsible for the submission of its financial statements to the Auditor-General in accordance with the provisions of Section 13 of the Public Audit Act, 2003.

Auditor-General’s ResponsibilityMy responsibility is to express an opinion on these financial statements based on the audit and report in accordance with the provisions of Section 15 (2) of the Public Audit Act, 2003 and submit the audit report in compliance with Article 229 (7) of the Constitution of Kenya. The audit was conducted in accordance with International Standards on Auditing. Those standards require compliance with ethical requirements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

OpinionIn my opinion, the financial statements present fairly, in all material respects the financial position of the Company as at 30 June 2012, and of its financial performance and its cash flows for the year then ended, in accordance with International Finan-cial Reporting Standards and comply with Companies Act, Cap 486 of the Laws of Kenya.

Report On Other Legal And Regulatory RequirementsAs required by the Kenya Companies Act, I report based on my audit, that;i) I have obtained all the information and explanations which to the best of my knowledge and belief, were necessary for the

purpose of the audit;ii) In my opinion, proper books of account have been kept by the Company, so far as appears from my examination of those

books; and,iii) The Company’s statement of financial position and statement of comprehensive income are in agreement with the books

of account.

Edward R. O. Ouko, CBS AUDITOR-GENERALNairobi, 21 January 2013

REPORT OF THE AUDITOR-GENERAL ON KENYA ELECTRICITY TRANS-MISSION COMPANY LIMITED FOR THE YEAR ENDED 30 JUNE 2012

KENyA NATIONAL AUDIT OffICE

REPORT OF THE INDEPENDENT AUDITORS


55

2011 restated Notes Sh’000

WHEELING REVENUE 280,280OPERATING EXPENSES 4 (a) (109,209) __________

GROSS PROFIT 171,071OTHER INCOME 3 669,884ADMINISTRATIVE EXPENSES (345,392)DOUBTFUL DEBTS PROVISION 4 (b) - _________ PROFIT BEFORE TAXATION 5 495,563TAXATION CHARGE 7 (57,815) _________

PROFIT FOR THE YEAR 437,748OTHER COMPREHENSIVE INCOME FOR THE YEAR - _________

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 437,748

KENYA ELECTRICITY TRANSMISSION COMPANY LIMITED

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

2012

Sh’000

314,8072(167,240)

_________

147,567960,912

(458,789)(591,780)

_________

57,910(23,608)

_________

34,302-

________

34,302


56


2010As restated Sh’000

5,192,448 -

- _________ 5,192,448 _________

268,945 3,299,408 _________ 3,568,353 _________

8,760,801

2,000 433,310

_________ 435,310

_________

7,768,846 _________

58,996 479,489 18,160

- _________ 556,645 ________

8,760,801

2011As restated Sh’000

12,310,182 18,154

4,082 _________

12,332,418 _________

617,783 6,042,043 _________ 6,659,826 _________

18,992,244

2,000 851,058 _________

853,058 _________

15,913,878 _________

130,544 2,065,990

8,774 20,000

_________ 2,225,308 _________18,992,244

2012

Sh’000

21,454,069 23,133

120,134_________

21,597,336_________

178,604 6,967,291 _________7,145,895

_________

28,743,231

2,000 885,360

_________887,360

_________

23,248,728_________

130,544 4,442,445

34,154 -

_________4,607,143

_________28,743,231

Notes

89

10

11

12

13

1314

7(c)

The financial statements on pages 53 to 77 were approved by the board of directors on 19th December 2012 and were signed on its behalf by:

Mr. Justus Kageenu Eng. Joel Kiilu

_________________________ _________________________Chairman/Director Managing Director

ASSETSNon current assetsProperty, plant and equipmentIntangible assetDeferred tax asset

Current assetsReceivables and prepaymentsCash and cash equivalents

Total assets

EQUITy AND LIABILITIESCapital and reservesShare capitalRevenue reserves

Non-current liabilitiesDeferred grant income

Current liabilities

Deferred grant incomePayable and accrualsCorporate tax payableDividend payable

Total equity and liabilities

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012


57


Total Equity

Kshs’000

2,000 433,310

_________ 435,310

435,310 437,748

(20,000) _________

853,058

853,058 34,302

_________ 887,360

Revenuereserve

Kshs’000

- 433,310

________ 433,310

433,310 437,748

(20,000) ________

851,058

851,058 34,302

________ 885,360

ShareCapital

Kshs’000

2,000 -

________ 2,000

2,000

- -

________ 2,000

2,000

- ________

2,000

At 1 July 2009Total comprehensive income for the year

At 30 June 2010 – As restated

At 1 July 2010 – As restatedTotal comprehensive income for the yearDividend – 2010

At 30 June 2011 – As restated

At 1 July 2011– As restatedTotal comprehensive income for the year

At 30 June 2012

The restatement relates to reclassif icat ion of Exchequer funding for development expenditure from capita l and reserve to deferred income as required by IAS 20. These are credi ted to the statement of comprehensive income as part of other income on a straight- l ine basis over the expected useful l ives of the related assets. The exchequer funding for development expenditure as at 30 June 2010 and as at 30 June 2011 was Kshs 7,694,407 and Kshs 11,206,407 respect ively.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012


58

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

2010restated Sh'000

685,156 (17,551) ________

667,605 ________

(1,853,029) (3,389,649)

- ________

(5,242,678) ________

2,000 -

7,872,481 ________

7,874,481 ________

3,299,408 -

________

3,299,408

2011restated Sh'000

1,753,716 (71,283) ________

1,682,433 ________

(49,117) (7,146,637) (19,620) ________

(7,215,374) ________

--

8,275,576 ________

8,275,576 ________

2,742,635

3,299,408 ________

6,042,043

2012

Sh'000

2,912,159 (118,362)

________

2,793,797 ________

(49,325) (9,254,319) (10,299) _________

(9,313,943) _________

-(20,000)

7,465,394 ________

7,445,394 ________

925,248

6,042,043 ________

6,967,291

157(c)

89

13(b)

CASH fLOW fROM OPERATING ACTIVITIESCash generated from operationsTaxation paid

Net cash generated from operating activities

CASH fLOWS fROM INVESTING ACTIVITIES

Purchase of property, plant and equipmentWork in progress (project costs)Purchase of intangible assets

Net cash used in investing activities

CASH fLOWS fROM fINANCING ACTIVITIESIssue of sharesDividends paidGrant income

Net cash generated from financing activities

INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AT END OF YEAR



59

1 ACCOUNTING POLICIES

Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

For the purposes of reporting under the Kenyan companies Act, in these financial statements the balance sheet is rep-resented by the statement of financial position and the profit and loss account is presented in the statement of compre-hensive income.

Adoption of new and revised Interna-tional Financial Reporting Standards (IFRS)

i)RELEVANT NEW STANDARDS AND AMEND-MENTS TO PUBLISHED STANDARDS EFFEC-TIVE FOR THE YEAR ENDED 30 JUNE 2012

The following relevant new and revised IFRSs were effec-tive in the current year and had no material impact on the amounts reported in these financial statements.

Amendments to IAS 1 Presentation of Financial Statements (as part of Improvements to IFRSs issued in 2010). The amendments to IAS 1 clarify that an entity may choose to disclose an analysis of other comprehensive income by item in the statement of changes in equity or in the notes to the financial statements. For other comprehensive income, the company has continued to present such an analysis in the notes to the financial statements, with a single-line pres-entation of other comprehensive income in the statement of changes in equity.

IAS 24 Related Party Disclosures (as revised in 2010) IAS 24 (as revised in 2010) has been revised on the follow-ing two aspects:

(a) IAS 24 (as revised in 2010) has changed the definition of a related party and (b) IAS 24 (as revised in 2010) intro-

duces a partial exemption from the disclosure requirements for government-related entities.

The Company is 100% owned by the Government of Kenya. The principal activity of the Company is to design, con-struct, operate and maintain new high voltage electricity transmission infrastructure, build interconnectors to facili-tate regional power trade, and to wheel electricity to The Kenya Power and Lighting Company Limited and other end users from generators who produce power in bulk. Due to adoption of the partial exemptions available in the revised IAS 24 (2009) these financial statements do not provide disclosure requirements under IAS 24 paragraph 18 (see note 16).

Amendments to IFRS 7 – Financial instruments disclo-sures

The amendment to IFRS 7 Financial Instruments: Disclo-sures resulting from the International Accounting Stand-ards Board’s (IASB) comprehensive review of off balance sheet activities. The amendment introduce additional disclo-sures, designed to allow users of the financial statements to improve their understanding of transfer of transactions of financial assets (for example securitisations), including understanding the possible effects of any risks that may re-main with the entity that transferred the assets. The amend-ments also require additional disclosures if a disproportion-ate amount of transfer transactions are undertaken around the end of the reporting period.

The application of the amendment has had no effect on the amounts reported in the current because the company has not entered into any such transfer transactions of financial assets during the year. Amendments to IFRIC 14 Prepayments of a Minimum Fund-

ing Requirement

IFRIC 14 addresses when refunds or reductions in future contributions should be regarded as available in accordance with paragraph 58 of IAS 19; how minimum funding re-quirements might affect the availability of reductions in fu-ture contributions; and when minimum funding requirements might give rise to a liability. The amendments now allow rec-ognition of an asset in the form of prepaid minimum funding contributions. The application of the amendments has not had material effect on the Company’s financial statements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012



60

ii)RELEVANT NEW AND AMENDED STANDARDS AND INTERPRETATIONS IN ISSUE BUT NOT YET EFFECTIVE IN THE YEAR ENDED 30 JUNE 2012

IFRS 9, Financial Instruments – Classification and Measurement (2010) IAS 12, Income Taxes – limited scope amendment (recovery of underlying assets) IAS 1, Presentation of Financial Statements – presentation of items of other comprehensive income IAS 19, Employee Benefits (2011) IFRS 13, Fair Value Measurement Amendment to interpretationsIAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements andtheir interaction

1 January 20121 January 2012

1 January 2012

1 January 20121 January 2012

1 January 2012

New and Amendments to standards

Effective for annual periods beginning on or after

IFRIC 19 Extinguishing Financial Liabilities with Equity In-struments

The Interpretation provides guidance on the accounting for the extinguishment of a financial liability by the issue of equity instruments. Specifically, under IFRIC 19, equity in-struments issued under such arrangement will be measured at their fair value, and any difference between the carrying amount of the financial liability extinguished and the consid-eration paid will be recognised in profit or loss.

The application of IFRIC 19 has had no effect on the amounts reported in the current and prior years because the compa-ny has not entered into any transactions of this nature.

Improvements to IFRS issued in 2010

The application of Improvements to IFRSs issued in 2010 has not had any material effect on amounts reported in the financial statements.


61

iii)IMPACT OF RELEVANT NEW AND AMEND-ED STANDARDS AND INTERPRETATIONS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012 AND FUTURE ANNUAL PERIODS

IFRS 9, Financial Instruments

IFRS 9 issued in November 2009 introduces new require-ments for the classification and measurement of financial assets. IFRS 9 amended in October 2010 includes the re-quirements for the classification and measurement of finan-cial liabilities.

IFRS 9 requires all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recog-nition and Measurement to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contrac-tual cash flows that are solely payments of principal and interest on the principal outstanding are generally meas-ured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods.

The most significant effect of IFRS 9 regarding the classifi-cation and measurement of financial liabilities relates to the accounting for changes in fair value of a financial liability (designated as at fair value through profit or loss) attributa-ble to changes in the credit risk of that liability. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other com-prehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributa-ble to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was recognised in profit or loss.

IFRS 9 is effective for annual periods beginning on or after 1 January 2015, with earlier application permitted.The directors anticipate that IFRS 9 will be adopted in the company’s financial statements for the annual period begin-ning 1 January 2015 and that the application of IFRS 9 may have a significant impact on theamounts reported in respect of the company’s financial as-sets and financial liabilities (e.g the company will classify financial assets as subsequently measured at either am-ortised cost or fair value). However, it is not practical to

provide a reasonable estimate of the effect until a detailed review has been completed.

IFRS 13 Fair Value Measurements

IFRS 13 replaces the guidance on fair value measurement in existing IFRS accounting literature with a single standard. The IFRS is the result of joint efforts by the IASB and the Financial Accounting Standards Board (FASB) to develop a converged fair value framework. The IFRS defines fair value, provides guidance on how to determine fair value and re-quires disclosures about fair value measurements. However, IFRS 13 does not change the requirements regarding which items should be measured or disclosed at fair value.

IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value meas-urements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those meas-urements).

With some exceptions, the standard requires entities to clas-sify these measurements into a ‘fair value hierarchy’ based on the nature of the inputs:

•Level 1 – quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;

•Level 2 – inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

•Level 3 – unobservable inputs for the asset or liability.

IFRS 13 is effective for annual periods beginning on or after 1 January 2013, with earlier application permitted.The directors anticipate that IFRS 13 will be adopted in the company’s financial statements for the annual period be-ginning 1 July 2013 and that the application of the new Standard may affect the amounts reported in the financial statements and result in more extensive disclosures in the financial statements, however, the company is yet to asses IFRS 13 full impact and intends to adopt the standard not later than the accounting period beginning on or after 1 Jan-uary 2013.

Deferred Tax: Recovery of Underlying Assets (Amendments

to IAS 12)

This amends IAS 12, Income Taxes, to provide a pre-sumption that recovery of the carrying amount of an asset measured using the fair value model in IAS 40, Investment Property, will normally be through sale. As a result of the amendments, SIC-21, Income Taxes – Recovery of Re-


62

valued Non-Depreciable Assets, would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previ-ously contained in SIC-21, which is accordingly withdrawn.

The above amendments are generally effective for annual periods beginning on or after 1 January 2012. The compa-ny will apply this amendment prospectively. The directors anticipate no material impact to the company’s financial statements currently as the company does not have invest-ment properties. However, the company would have to ap-ply this standard to any such arrangements entered into in the future.

Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)

This amends IAS 1, Presentation of Financial Statements, to revise the way other comprehensive income is presented.

The amendments:

• Preserves the amendments made to IAS 1 in 2007 to require profit or loss and other comprehensive income to be presented together, i.e. either as a single ‘state ment of profit or loss and comprehensive income’, or a separate ‘statement of profit or loss’ and a ‘state ment of comprehensive income’ – rather than requir ing a single continuous statement.

• Requires entities to group items presented in other comprehensive income based on whether they are potentially reclassifiable to profit or loss subsequently. i.e. those that might be reclassified and those that will not be reclassified.

• Requires tax associated with items presented before tax to be shown separately for each of the two groups of other comprehensive income items (without chang ing the option to present items of other Comprehen sive income either before tax or net of tax).

The above amendments are generally effective for annual periods beginning on or after 1 July 2012. The company will apply the amendments prospectively. Other than pres-entation, the directors anticipate no material impact to the company’s financial statements.

IAS 19 (as revised in 2011)- Employee Benefits

The amendments to IAS 19 change the accounting for de-fined benefit plans and termination benefits. The most sig-nificant change relates to the accounting for changes in de-fined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obliga-tions and in fair value of plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of IAS 19 and accelerate the recognition

of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through oth-er comprehensive income in order for the net pension asset or liability recognised in the statement of financial position to reflect the full value of the plan deficit or surplus.

The amendments to IAS 19 are effective for annual periods beginning on or after 1 January 2013 and require retrospec-tive application with certain exceptions. The directors antic-ipate that the amendments to IAS 19 will be adopted in the company’s financial statements for the annual period begin-ning 1 January 2013 and that the application of the amend-ments to IAS 19 may have impact on amounts reported in respect of the company’s defined benefit plans. However, the directors have not yet performed a detailed analysis of the impact of the application of the amendments and hence have not yet quantified the extent of the impact.

The Company did not early-adopt any new or amended standards in the year.

Basis of preparationThe financial statements are prepared under the historical cost convention as modified to include the revaluation of certain assets. The principal accounting policies adopted in the preparation of these financial statements remain un-changed from the previous year and are set out below.

Revenue recognitionGovernment grants are recognised as income over the pe-riod necessary to match them with the related costs which they are intended to compensate on a systematic basis.

The main source of revenue is wheeling charge for trans-mitting electricity from the producer (source) to a substation to facilitate distribution to the final consumer. The wheeling charge is measured based in kilowatt hours (KWH) of power transmitted and is recognised upon delivery of electricity.

Revenue from rendering the service is recognised when all the following conditions are satisfied:

The amount of revenue can be measured reliably;

It is probable that the economic benefits Associated with the transaction will flow to the company;

The stage of completion of the transaction at the end of the reporting period can be measured Reliably; and

The costs incurred for the transaction and the costs to complete the transaction can be Measured reliably.


63

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the com-pany and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimat-ed future cash receipts through the expected life of the fi-nancial asset to that asset’s net carrying amount on initial recognition.

Deferred grant incomeThis represents capital contributions received from the Government of Kenya. These are credited to the statement of comprehensive income as part of other income on a straight-line basis over the expected useful lives of the re-lated assets.

TaxationCurrent taxation is provided on the basis of the results for the year as shown in the financial statements, adjusted in accordance with the tax legislation.

Deferred tax is provided using the liability method for all temporary differences arising between the tax base of the assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred income tax.

Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit can be foreseen.

Property, plant and equipmentProperty, plant and equipment are stated as cost less ac-cumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on straight line method to write-off the cost of property, plant and equipment in equal annual instalments over their estimated useful lives. Depreciation is calculated from the date of purchase of an asset, using the following annual rates:

Capital work in progress NilTransmission line 2.5%Motor vehicles 25% Furniture, fittings and office equipment 12.5%Computers & accessories 33.3%

An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected

from its use or disposal. Any gain or loss arising on unfore-seeable of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset at the disposal date) is included in profit or loss in the year the asset is derecognised.

The asset’s residual values, estimated useful lives and methods of depreciation are reviewed at the end of each reporting period with the effect of any changes in estimate accounted for on a prospective basis.

Intangible assetsCosts incurred on computer software are initially accounted for at cost as intangible assets and subsequently at cost less any accumulated amortisation and accumulated impair-ment losses. Amortisation is calculated on the straight line basis over the estimated useful lives not exceeding a period of 3 years.

Accounts receivablesTrade receivables are stated at their nominal value as re-duced by appropriate allowances for estimated irrecover-able amounts. Objective evidence of impairment of the re-ceivables is when there is significant financial difficulty of the counter party or when there is a default or delinquency in payment according to agreed terms. When a trade re-ceivable is considered uncollectible it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance ac-count. Changes in the carrying amount of the allowance account are recognised in profit or loss.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Employee benefits costs(i) Retirement benefit obligations

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have ren-dered service entitling them to the contributions. A defined contribution plan is a pension plan under which the com-pany pays fixed contributions into a separate entity. The scheme is funded by contributions from both the company


64

and employees. The company and all its employees also contribute to the National Social Security Fund, which is a defined contribution scheme.

In addition the company pays gratuity to top management on contract. The gratuity is paid at the end of the contract period at the rate of 15% and 31% of the total basic salary over the contract period. An accrual is made for gratuity based on the rate of 15% and 31% pa.

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have ren-dered service entitling them to the contributions.

(ii) Other entitlements

The estimated monetary liability for employees accrued leave entitlement at the reporting date is recognised as an expense accrual.

Foreign currenciesThe financial statements are presented in Kenya Shillings, which is the company’s functional and reporting currency. In preparing the financial statements, transactions in cur-rencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange pre-vailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.

ComparativesWhere necessary, comparative figures have been reclassi-fied to conform to changes in presentation in the current year.

2. CRITICAL JUDGEMENTS IN APPLYING THE ENTITY’S ACCOUNTING POLICIESIn the application of the company’s accounting policies, which are described in note 1 above, the directors are re-quired to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on

an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period or in the periods of the revision and future periods if the revision affects both current and future periods

The following are the key assumptions concerning the fu-ture, and other key sources of estimation uncertainty at the end of the reporting period, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Impairment lossesAt each reporting date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suf-fered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Property and Equipment Property and equipment is depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed at the reporting date and may vary depending on a number of factors. In reassessing asset lives, factors such as tech-nological innovation, product life cycles and maintenance programmemes are taken into account. Residual value as-sessments consider issues such as future market condi-tions, the remaining life of the asset and projected disposal values.

Contingent liabilitiesThe directors evaluate the status of any exposures on a reg-ular basis to assess the probability of the company incurring related liabilities. However, provisions are only made in the financial statements where, based on the directors’ evalua-tion, a present obligation has been established.


65

Depreciation cost for transmission lines 58,996

Maintenance cost for transmission lines 50,213 ________

109,209

(b) Doubtful debts provision The Doubtful debts provision is as a result of disputed billings. KETRACO billed Kenya Power and Lighting Company Ltd (KPLC) based on the Energy Regulatory Commission (ERC) approved transmission tariff of Kshs 0.77 per Kwh multiplied by the units generated and wheeled through the transmission lines owned by KETRACO. However, KPLC proposes to use the embedded cost model that incorporates the length of the transmission line in the computation of wheeling charge payable to KETRACO. As a result of this, the disputed balances as at 30 June 2012 amount to Sh 591,780, 197.

305,5918,241

24,361159,512

5,3202,750

245

233,8952,016

25,39678,0201,4662,000

-

Staff costs (note 6) Directors’ emoluments - fees - other Depreciation (note 8) Amortisation (note 9)Auditors’ remuneration – current year Loss on disposal of property, plant and equipment

The prof i t before taxat ion is arr ived at af ter charging/(credi t ing):

5.PROFIT BEFORE TAXATION

130,544

36,696________

167,240

Exchequer funding for recurrent expenditure 400,000Interest Income 209,505Deferred grant income amortisation 58,996Miscellaneous Income 1,383 ________ 669,884

2012Sh’000

380,000444,292130,544

6,076________

960,912

2011Sh’000

Interest income relates to interest earned on the bank account balances and it is subject to 15% withholding tax. Other income represents income received from sale of tender documents.

3. OTHER INCOME

4. EXPENSES

(a) Operating Expenses


66

Salaries and wages 165,938Other staff costs 52,755Leave pay provision 6,626Pension contribution 5,401Gratuity provisions 2,976NSSF and NHIF contributions 199 ________

233,895 Number of staff 107

6. STAFF EXPENSES

237,45946,7056,808

10,8783,456

285_______

305,591

127

2012Sh’000

2011Sh’000


67

2011 Sh’000

-3,8734,173

(5,887)59,738

________

61,897________

(2,923)(1,159)

________

(4,082)________

57,815

495,563

148,66991,038

(182,892)3,8734,173

(5,887)(1,159)

________

57,815

18,16061,897

(71,283)-

________

8,774

2012 Sh’000

---

6,372133,288

_________

139,660_________

(228,412)112,360

_________

(116,052)_________

23,608

57,910

17,37339,368

(151,865)--

6,372112,360

________

23,608

8,774139,660

(118,362)4,082

_________

34,154

(a) Taxation charge

Current taxation based on adjusted profit at 30% current year charge Current tax penalty Prior year tax penalty Prior year undercharge/ (overcharge) – current tax Corporation tax on separate sources of income Deferred taxation (Note 10) - current year prior year under provision (b) Reconciliation of taxation charge to expected taxation based on accounting profit before taxation Accounting profit before taxation Taxation at the applicable rate 30% Tax effect of non-deductible expenses Tax effect of revenue not taxable Tax penalty - current year - prior year Prior year undercharge/ (overcharge) – current tax Prior year deferred tax provision (c) Taxation payable Balance brought forward Charge for the year Paid during the year Instalment tax penalty

7. TAXATION


68

8. PROPERTY, PLANT AND EQUIPMENT

TotalSh’000

5,242,678 7,195,754

- _________

12,438,432

9,303,644-

(459)_________

21,741,617_________

50,230 78,020

_________

128,250

159,512(214)

_________

287,548_________

21,454,069

12,310,182

Capitalwork in

progressSh’000

3,389,649 7,146,637

(4,870,067)_________

5,666,219

9,254,3191,433,887

-__________

16,354,425__________

- -

__________

-

--

__________

-_________

16,354,425

5,666,219

Accessories computer

Sh’000

297 9,221

- _________

9,518

12,539-

(459)_________

21,598_________

29 2,622

_________

2,651

6,815(214)

_________

9,252_________

12,346

6,867

furniture, fittings &

office furniture

Sh’000

48,148 21,196

- _________

69,344

22,261--

_________

91,605_________

2,234 7,512

__________

9,746

10,673-

_________

20,419_________

71,186

59,598

Vehicles motor

Sh’000

19,023 18,700

- _________

37,723

14,525--

_________

52,248_________

3,328 8,890

_________

12,218

11,480-

_________

23,698_________

28,550

25,505

Transmission lines

Sh’000

1,785,561 -

4,870,067 _________

6,655,628

-(1,433,887)

-_________

5,221,741_________

44,639 58,996

_________

103,635

130,544-

_________

234,179_________

4,987,562

6,551,993

COST

At 1 July 2010AdditionsTransfers from WIP

At 30 June 2011and At 1 July 2011

AdditionsTransfer to WIP*Disposal

At 30 June 2012

DEPRECIATION

At 1 July 2010Charge for the year

At 30 June 2011 and At 1 July 2011

Charge for the yearEliminated on disposal

At 31 June 2012

NET BOOK VALUE

At 30 June 2012

At 30 June 2011


69

9. INTANGIBLE ASSET - Computer software

-49

1,9882,045

4,082

-2,9231,159

4,082

104,6538,6384,0303,083

120,134

4,082228,412

(122,360)

120,134

The net deferred tax asset is at tr ibutable to the fol lowing i tems:

Deferred tax asset:

Tax lossesExcess depreciat ion over capita l a l lowances Leave pay provisionStaff gratui ty provision

Movement in deferred tax account

At beginning of the year Prof i t or loss credi t (note 7) Pr ior year under provision

At end of the year

10. DEFERRED TAX ASSET

2011sh’000’

-19,620

-

19,620

-1,466

1,466

18,154

2012sh’000’

19,620 10,299

29,919

1,466 5,320

6,786

23,133

COST

At 1 July 2011 Additions At 30 June 2012

AMORTISATION

At 1 July 2011 Charge for the year At 30 June 2012

NET BOOK VALUEAt 30 June 2012


70

11. RECEIVABLES AND PREPAYMENTS 2012 2011

Sh ‘000’

Wheel ing charge due from KPLC 542,434Medical and insurance prepayments 6,891Rent deposit 3,379Other receivables 65,079 617,783

Provision for doubtful receivables -

617,783

12. SHARE CAPITAL

Authorised, issued and ful ly paid 20,000 shares of Sh 100 each 2,000

Sh ‘000’

721,6139,0593,311

36,401

770,384

(591,780)

178,604

2,000

2012Sh’000

2012Sh’000


71

These relate to grants from the Government of Kenya used for the construct ion of transmission l ines that are being amort ised over the useful l ives of the related assets

2010restated

Sh ‘000’

-3,772,980

(12,500)_________

3,760,480

- 4,099,501

(32,139)_________

4,067,362

- 7,872,481

(44,639)________

7,827,842

58,9967,768,846

_________

7,827,842

2011restated

Sh ‘000’

3,760,4803,921,427

(14,280)_________

7,667,627

4,067,362 4,354,149

(44,716)_________

8,376,795

7,827,842 8,275,576

(58,996)_________

16,044,422

130,54415,913,878_________

16,044,422

2012

Sh ‘000’

7,667,6273,512,000

(23,148)_________

11,156,479

8,376,795 3,953,394 (107,396)

_________

12,222,793

16,044,422 7,465,394 (130,544)

_________

23,379,272

130,54423,248,728_________

23,379,272

(a)Deferred grant income reconciliation

Direct component*

Deferred grant income brought forwardReceived in the year Amortisation

Deferred grant income brought forward

Indirect component**Deferred grant income brought forwardReceived in the year Amortisation


(b)Total reconciliation

Deferred grant income brought forwardAdditionsAmortisation


(c)Amounts will be amortised as below :

Grant income to be amortised within one yearGrant income to be amortised after one year

At the end of the period

*The direct component relates to grant received direct ly from government.**The indirect component relates to loans repayable by the government from other f inanciers.

13. DEFERRED GRANT INCOME


72

This relates to receipts from the exchequer for development (capita l) expenditure. The amount has been committed for construct ion of var ious transmission l ines.

Exchequer Funding relates to Funding disbursed by Government to i ts aff i l iated organizat ions for devel-opment expenditure. Kenya Electr ic i ty Transmission Company Limited receives annual disbursements from the government based on the annual budget. The development expenditure is used to f inance cap-i ta l projects.

15. NOTES TO THE CASH FLOW STATEMENT

14. TRADE AND OTHER PAYABLES

417,233 4,025,212

-

4,442,445

Trade payables AccrualsPayrol l accrual

471,5411,593,531

918

2,065,990

The accruals relate to amount payable to the contractor in relat ion to the construct ion on Nairobi- Mombasa l ine outstanding at year end

2010restated

Shs ‘000’

469,021

50,230 -

(44,639)

(268,945) 479,489

685,156

2011restated

Shs ‘000’

495,563

78,020 1,466

(58,996)

(348,838)1,586,501

1,753,716

2012

Shs ‘000’

57,910

159,512 5,320

(130,544) 245

439,179 2,380,537

2,912,159

Reconci l iat ion of prof i t before tax to cash generated from operat ions:

Prof i t before tax

Adjustments for:Depreciat ionAmort isat ionAmort isat ion of deferred grant income Loss on disposal

Changes in working capital:Decrease/ ( increase) in trade and other receivablesIncrease in trade and other payables

Cash generated from operat ions

2012Sh’000

2012Sh’000

2010Sh’000


73

2012Shs’000

3,847,559380,000

3,512,000_________

7,739,559

129,833_________

84,502

32,602

2011Shs’000

4,305,002400,000

3,921,427________

8,626,429

542,434________

47,308

27,412

(i) Government of Kenya

Deferred GrantsExchequer funding for recurrent expenditureGovernment of Kenya grants

(ii) The Kenya Power and Lighting Company Limited Included in trade receivables:Wheel ing charges receivable

(iii) Key management compensationThe remunerat ion of directors and other members of keymanagement dur ing the year was as fol lows:

Salar ies and other benef i ts

Directors’ fees and emoluments ( included in key Management compensat ion above)

16. RELATED PARTY DISCLOSURESThe Government of Kenya is the principal shareholder in Kenya Electricity Transmission Company Limited holding 100% equity interest. The Government also holds 50% and 70% of the equity interest in The Kenya Power and Lighting Company Limited (KPLC) and Kenya Electricity Generating Company Limited (KenGen) respectively. The company is related to KPLC and Ken-Gen through common control. During the year, the following transactions were carried out with related parties as analysed as follows:-

Transactions with related parties are detailed as follows:-

17. FUTURE OPERATING LEASE RENTAL PAYABLE Amounts payable by the company under various operating lease agreements negotiated with landlords as at the year end were as follows:

Within one year 13,865 10,920In the second to fifth years inclusive 30,275 36,850 _______ _______

44,140 47,770


74

18. FINANCIAL RISK MANAGEMENTThe Company’s activities expose it to a variety of financial risks including credit and liquidity risks and effects of changes in foreign currency. The Company’s overall risk management programmeme focuses on unpredictability of changes in the busi-ness environment and seeks to minimise the potential adverse effect of such risks on its performance by setting acceptable levels of risk. The company does not hedge any risks and has in place policies to ensure that credit is only extended to cus-tomers with an established credit history.

The Company’s financial risk management objectives and policies are detailed below:

(i) Credit risk

The Company has exposure to credit risk, which is the risk that a counter party will be unable to pay amounts in full when due. Credit risk arises from cash and cash equivalents, and deposits with banks, as well as trade and other receivables and available-for-sale financial investments.

Management assesses the credit quality of each customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external assessment in accordance with limits set by the directors. The amounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated by the company’s management based on prior experience and their assessment of the current economic environment.

The carrying amount of financial assets recorded in the financial statements representing the company’s maximum exposure to credit risk without taking account of the value of any collateral obtained is made up as follows:

fully performingSh ‘000’

129,8336,967,291

167,9006,042,043

ImpairedSh ‘000’

591,780-

--

Past dueSh ‘000’

--

374,534-

At 30 June 2012

Trade receivablesBank balances

At 30 June 2011

Trade receivablesBank balances

The customers under the ful ly performing category are paying their debts as they cont inue trading.The credi t r isk associated with these receivables is minimal and the al lowance for uncol lect ible amounts that the Company has recognised in the f inancial statements is considered adequate to cover any potent ia l ly i r recoverable amounts.

The Company has signif icant concentrat ion of credi t r isk on amounts due from KPLC.

The Board of Directors sets the company’s credi t pol ic ies and object ives and lays down parameters within which the var ious aspects of credi t r isk management are operated.


75

(ii) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the company directors, who have built an appropriate liquidity risk management framework for the management of the company’s short, medium and long-term funding and liquidity man-agement requirements. The Company manages liquidity risk through continuous monitoring of forecasts and actual cash flows.

The table below represents cash flows payable by the Company under non-derivative financial liabilities by their remaining contractual maturities at the reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows, whereas the company manages the inherent liquidity risk based on expected undiscounted cash inflows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

(iii) Market risk

The board has put in place an internal audit function to assist it in assessing the risk faced by the company on an ongoing basis, evaluate and test the design and effectiveness of its internal accounting and operational controls.

Market risk is the risk arising from changes in market prices, such as interest rate, equity prices and foreign exchange rates which will affect the company’s income or the value of its holding of financial instruments. The objective of market risk man-agement is to manage and control market risk exposures within acceptable parameters, while optimising the return. Overall responsibility for managing market risk rests with the Audit and Risk Management Committee.

The Company’s Finance Department is responsible for the development of detailed risk management policies (subject to review and approval by Audit and Risk Management Committee) and for the day to day implementation of those policies.

There has been no change to the company’s exposure to market risks or the manner in which it manages and measures the risk.

At 30 June 2012Financial assets

LiabilitiesTrade and other payables

Net foreign currency liability

(a) Foreign currency risk

The Company has transactional currency exposures. Such exposure arises through purchases of goods and services that are done in currencies other than the local currency. Invoices denominated in foreign currencies are paid after 30 days from the date of the invoice and conversion at the time of payment is done using the prevailing exchange rate.

The carrying amount of the company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

TotalShs ‘000

- ________

(49,239)________

(49,239)

OthersShs ‘000

- ________

- ________

-

KshShs ‘000

- _______

(49,239)________

(49,239)


76

The Company manages foreign exchange risk form future commercial transactions and recognised assets and liabilities by projecting for expected sales proceeds and matching the same with expected payments.

At 30 June 2011Financial assets

LiabilitiesTrade and other payables

Net foreign currency liability

Foreign currency sensitivity analysis

The following table demonstrates the effect on the Company’s statement of comprehensive income on applying the sensitivity for a reasonable possible change in the exchange rate of the three main transaction currencies, with all other variables held constant. The reverse would also occur if the Kenya Shilling appreciated with all other variables held constant.

2012EuroNor Kroner2011EuroNor Kroner

Change in currency rate

10%10%

10%10%

Effect on Profit before taxShs’ 000

(1,559)(903)

(32)Nil

Effect on equityShs’ 000

(1,091)(632)

(22)Nil

(b) Interest rate risk

Interest rate risk is the risk that the Company’s financial condition may be adversely affected as a result of changes in interest rate levels. The company’s interest rate risk arises from bank deposits. This exposes the company to cash flow interest rate risk.

The interest rate risk exposure arises mainly from interest rate movements on the company’s deposits.

Management of interest rate risk

To manage the interest rate risk, management has endeavoured to bank with institutions that offer favourable interest rates.

Sensitivity analysis

The Company analyses its interest rate exposure on a dynamic basis by conducting a sensitivity analysis. This involves de-termining the impact on profit or loss of defined rate shifts. The sensitivity analysis for interest rate risk assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis has been performed on the same basis as the prior year.

Using the end of the year figures, the sensitivity analysis indicates the impact on the statement of comprehensive income if current floating interest rates increase/decrease by one percentage point as a decrease/increase of KShs 4.4 million (2011: KShs 2.0 million). A rate increase/decrease of 5% would result in a decrease/increase in profit before tax of KShs 22.2 million (2011 – KShs 10.4 million):

TotalShs ‘000

- ________

(643)________

(643)

OthersShs ‘000

- ________

- ________

-

KshShs ‘000

- _______

(643)_______

(643)


77

(i) Capital management

Capital managed by the Company is the equity attributable to the equity holders. The primary objective of the company’s capital management is to ensure that it maintains healthy capital ratio in order to support its business.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To main-tain or adjust the capital structure, the company may adjust the dividend payment to shareholders. No changes were made in the objectives, policies or processes during the years ended 30 June 2012 and 30 June 2011.

The Company monitors capital using a gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total of interest bearing loans and borrowings, trade and other payables less cash and cash equivalents.

The major factors that impact on the equity of the company include the following:

•Revenue received from wheeling •Operation and maintenance cost•Cost of operating the transmission business •Cost of expanding the business to ensure that capacity growth is in line with electricity demand •Taxation•Dividends

The company uses Power System Development Planning process, which forecasts long-term growth in electricity demand; evaluates the alternative means to meet and manage that demand and comes up with a Least Cost Power Development Plan. The planning process determines a forward electricity cost curve (the Long Run Marginal Cost), which will give an indication of the size of the price increases that the company requires in order to be sustainable over the medium and long term. Adjust-ment of the tariffs for the electricity business is regulated and is subject to the process laid down by the Energy Regulatory Commission.

The electricity business is currently in a major expansion phase driven by a rise in demand and Government policy. The funding of transmission capacity is to be obtained from, exchequer funding, donor funding from Local and international institutions and cash generated from wheeling business.. The adequacy of electricity tariffs allowed by the regulator and the level of Gov-ernment support are key factors in the sustainability of the company.

(ii) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of meas-urement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

2011 Sh ‘000 Trade and other payables (Note 14) 2,065,990 Less cash and short-term deposits (6,042,043) __________ Net debt (3,976,053) __________ Equity 853,058 __________ Gearing ratio Nil

2012Sh ‘000

4,442,445(6,967,291)

__________

(2,524,846)__________

887,360__________

Nill


78

2012 2011 Sh ‘000 Sh ‘000

(b) Legal contingent liabilities 3,000 3,000

19. CONTINGENT LIABILITIES(a) The Kenya Revenue Authority issued an assessment of Shs 192,419,901 in relation to principle tax and Shs 2,391,402 in relation to PAYE for periods between 2009 and 2011. The principal tax is in relation to the wheeling charges. This has been dis-puted by the tax consultants and Kenya Revenue Authority is yet to revert on the same. Kenya Electricity Transmission Com-pany Limited has petitioned the Kenya Revenue Authority for the resolution of the issue of principle tax on disputed wheeling charges and a waiver of the penalties and interest and, in the opinion of directors, the ultimate resolution of this matter would most likely not have a material effect on the results of the company operations, financial position or liquidity.

This amount relates to a legal suit against the company. The petitioners contest the construction of Gibe III dam along Lake Turkana as they fear that it would have a devastating effect on the communities around the lake and their livelihood. The likely outcome of these suits cannot be determined as at the date of signing these financial statements.

Based on the information currently available, the Directors believe that the ultimate resolution of these legal proceedings would most likely not have a material effect on the results of the company’s operations, financial position or liquidity.

20. CAPITAL EXPENDITURE COMMITMENTS

21. INCORPORATION

The company is incorporated in Kenya under the Companies Act.

22. CURRENCY

These financial statements are presented in Kenya shillings (Sh)

Authorised and contracted for 11,888,580 13,616,000

Authorised but not contracted for 3,512,000 3,696,000 _________ _________ 15,400,580 17,312,000


79

2011Sh’000

280,280

58,99650,213

_______109,209 _______

400,000209,505 58,996 1,383

________669,884

________

165,938 52,755 19,024 14,371 4,805 9,472 5,401 8,422 2,016 25,396 6,091

6,626 6,674 6,631 1,466 2,976 1,520 2,000

5381,009

6261,635

_______ 345,392

_______-

_______495,563

WHEELING REVENUE

OPERATING EXPENSES

Depreciation cost for transmission linesMaintenance cost for transmission lines

GROSS PROfIT

OTHER INCOMEExchequer funding for recurrent expenditureInterest incomeAmortisation of grantsMiscellaneous Income

ADMINISTRATIVE EXPENSES

Salaries and Wages*Other Staff Costs*Depreciation*Rent Printing and stationery*Professional fees Pension Contribution*Office expenses Board Fees - fees* - other*Motor Vehicle Expenses Leave pay provisionPostage and Telephone and Internet Services Corporate CommunicationAmortizationGratuity provisions*Transport*Audit Fees Bank ChargesElectricitySecurityMiscellaneous expenses*

Doubtful debts provision

PROfIT BEfORE TAXATION

2012Sh’000

314,807

130,54436,696

_______167,240_______

380,000444,292 130,544

6,076_______960,912_______

237,459 46,705 28,754 19,221 12,285 11,941 10,878 10,632 8,241 24,361 7,744

6,808 6,394 6,104 5,320 3,456 3,281 2,750

2,5212,815

812307

_______458,789_______

591,780_______

57,910

DETAILED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012


*Various reclassif icat ion adjustments have been made on the comparat ives to conform to the changes in the presentat ion in the current year.


80


80KETRACO TRANSMISSION LINES

0 50 100 150 200 25025Kilometers

o

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2%2

%2

%2

%2

%2

%2

%2%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

%2

Isinya SSFuture

Voi

Wote

Meru

Hola

Lamu

Galu

Maua

Konza

Kisii

Narok

Bomet

Ortum

Kitui

Wajir

Rabai

Nyaga

Sotik

Kyeni

Thika

Sondu

Suswa

Isiolo

Kisumu

Kitale

Kilifi

Taveta

MumiasLessos

MwingiAwendo

Garsen

IsinyaKajiado

Nanyuki

Eldoret

Garissa

Turkwel

Rangala

Kamburu

Malindi

Namanga

Homa Bay

Kabarnet

Machakos

Embakasi

Chemosit

Githambo

Isabenia

Rumuruti

Habaswen

KindarumaOl' Karia

Sultan Hamud

Loiyangalani

Wajir

Turkana

Marsabit

Kitui

Garissa

Isiolo

Tana River

Mandera

Narok

Kajiado

Kilifi

Samburu

Taita Taveta

Meru

Baringo

Kwale

Laikipia

Lamu

Nakuru

Makueni

West Pokot

Siaya

Nyeri

Migori

Nandi

EmbuHoma Bay

Bomet

Kisumu

Kiambu

Bungoma

Murang'a

Machakos

Tharaka

Busia

Nyandarua

Kisii

KakamegaUasin Gishu

Kericho

Trans Nzoia

Keiyo-Marakwet

KirinyagaNyamira

Nairobi

Vihiga

MombasaMombasaMombasa

Narok-Bomet

Rum

uruti

-Mara

lal

Gar

issa

-Waj

ir

Rab

ai-G

alu

Turkwel-O

rtum

-Kitale

Turkana

Lake Victoria

Baringo

Magadi

Naivasha

Bogoria

NakuruElementaita

Kamburu-Meru

Lessos- Tororo

Loya

ngal

ani-S

usw

a

Nairobi - Mombasa

Nairobi Ring

Line

Kindaruma-Garissa

Easter

n Elec

tricity Highway Projec t

Suswa-Ngong

Rab

ai-L

amu

Olkaria-Lessos-Kisumu

Nyanyuki-Rumuruti

Mwi

ngi-W

ote

Garsen-G

arissa

Lamu

Wote

Hola

Iten

Meru

Kitui

Narok

Siaya

Busia

Wajir

Vihiga

Kilifi

Kisumu

Nakuru

Kiambu

Lodwar

Kajiado

Mandera

BungomaEldoret

Nanyuki

Garissa

Maralal

Machakos

Homa Bay

Kakamega

Kabarnet

Marsabit

Nyahururu

Kapenguria

KENYA 132KV-500KV ELECTRICITY TRANSMISSION NETWORK.

Legend%9 Substations

STATUS OF KETRACO LINES

Completed

Ongoing

Planned

County Headquarters

County Boundary

Water Bodies

Kenya Power Lines

Galu -Lunga lu

nga


81

KETRACO and Iberdrola Ingenier ia y Construccion S.A.U Company teams dur-ing the contract signing for the construct ion of the 220kV r ing around Nairobi Metropol i tan area.

KETRACO staff member discusses the transmission process with delegates at the 4th ArGeo conference held at the United Nat ions Headquarters in Gigir i, November 2012.

Members of the Board give speeches during the Staff Annual Party 2012


82

Mr. P. K. Das, Senior Vice-President of Jyot i Structures Limited and KETRACO Managing Director Eng. Ki i lu during the contract signing for the construct ion of the Suswa-Isinya project carr ied out at the Company’s off ices in Upper hi l l. Staff members speak to community members about

electr ic i ty transmission during an exhibi t ion in Voi

Staff members attending a talk on healthy l iv ing giv-en by AON Insurance trainers.

A Project-Affected-Person receives a compensat ion cheque for the use of her land for the Ki l imambo-go-Thika-Githambo 132kV transmission l ine project way-leave.


8335m high tower( Mombasa-Nairobi project)

84

2nd Floor Capitol Hill Square, Chyulu Rd, Upper HillP.O.Box 34942-00100 Nairobi, Kenya.Phone: (+254) 20 4956000Mobile: (+254) (-719- 018000, (+254) 732 28000Email: [email protected]: www.ketraco.co.ke

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