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The electrification ratio in Kenya is low with only 22% of the population

having access to electricity and a per capita consumption of 130 kWh

against 550 kWh on average for SubSaharan Africa. Outside the main

centres, access to electricity is much lower, 7-8%, with low reliability in

some areas. There is also an additional challenge of reinforcing the powersupply to already electrified areas/towns/regions aiming at least-cost

technical solutions that offer a combination of increased capacity, improved

reliability and better voltage control. The Government of Kenya (GoK) has

translated its vision for the sector into the Energy Access Scale-Up Program

under which the country will make investments in transmission

infrastructure to the tune of USD 1,096 million by 2014.

The GoK has translated its vision for the sector into the Energy Access

Scale-Up Program, with a target of 40% access by 2020; with anintermediate target to electrify one million new customers and extend

electricity service to all priority loads in rural areas in the next five

 years.The major challenge has been increasing the access rates outside the

main centres to increase the share of rural population with access to

electricity as well as reinforcing the power supply to already electrified

areas/towns/regions aiming at least-cost technical solutions that offer a

combination of increased capacity, improved reliability through a reduction

in the current high energy lossescaused by the overloading of the systemand better voltage control, i.e. an adequate supply quality as the consumer's

dependency of electricity increases.

The Government intends to develop a larger power grid that will enable

connection to many green power sources to major load centres. This project

 will result in increased and reliable power supply to the affected regions

and also provide a platform for regional integration of the power systems

and regional power trade facilitated by the construction of the Kenya-

Ethiopia interconnection and the ongoing interconnection project of theNile Equatorial Lakes Countries.

GoK has decided that all new transmission infrastructure facilities will be

financed and owned by the State in order to catalyse the development of the

country ‟s generation and distribution infrastructure. In support of the

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Electricity Access Scale-Up Project, the GOK prepared a prospectus, the

Kenya Electricity Access Investment Program Prospectus: 2009-2014which

estimates that USD 4,902 million of investments will be required in new 

generation, transmission and distribution assets to meet the objectives of 

the program. Of this amount, KETRACO will need to make capitalinvestments to the tune of USD 1,096 million. I

Private Sector Participation: Key sector reforms introduced by the

Government including the unbundling of KPLC in the 1990‟s,

establishment of the Energy Regulatory Commission, development of Feed

in Tariffs Policy and the creation of the Geothermal Development Company 

have been instrumental in the increased participation of the private sector.

IPPs are expected to play a more important role in the future as additional

capacity of 2,130-2,430 MW is planned for development by 2015. The

presence of IPPs in the generation sub-sector encourages competition

among market participants and as such, contributes to the availability of 

more reliable and cheaper power to the Kenyan economy.

Tariffs: The electricity price for KenGen is determined through Long-

term Power Purchase Agreements that were entered into with KPLC and

approved by the ERC in June 2009. The KenGen remuneration is made up

of the capital recovery charge, fixed operation and maintance charge and

the variable operation and maintenance charge. Retail base tariffs for KPLC

 were increased in July 2008 after remaining unchanged since 2000.

Tariffs are adjusted automatically for monthly changes in generation

related fuel costs and exchange rate depreciation and every six months for

inflation. The domestic tariff category is divided into four consumption

 blocks with increasing energy charges. The first block of up to 50 kWh per

month is the Lifeline Tariff, which is cross-subsidised by other tariff 

categories in order to ensure affordability to the poorer users. As of the end

of 2009, the average tariff was about USc 11/kWh. The key motivationunderlying the creation of KETRACO was to allow the development of the

country ‟s transmission infrastructure without passing on the investment

costs to consumers through increased tariffs. As such, tariffs are expected

to remain at affordable levels to encourage new connections in the future.

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http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-

Operations/KENYA%20-

Power%20Transmission%20System%20Improvement%20Project.pdf  

 A recent listing of plans by DFAIT (Canada’s Department of Foreign Affairs

and International Trade) says that in the next four years, Kenya is expected

to construct over 4,000 km of high voltage transmission infrastructure at

an estimated cost of US$ 1.3 billion.

http://magazine.appro.org/index.php?option=com_content&task=view&id

=1379&Itemid=44 

Kenya Power reports transmission and distribution losses of 18 per cent,

almost double the best-practice benchmark of 10 per cent. As a result,

Kenya Power's operational inefficiencies make the country lose a staggering

0.3 per cent of GDP. AICD projects that the country needs to spend $1

 billion annually to keep up with demand and achieve national

electrification targets, but at present only $471 million a year goes to the

power sector.

http://allafrica.com/stories/201108010016.html?page=2 

Kenya Power announced plans to invest nearly $1 billion in its grid network 

over the next decade to cut inefficiencies and reduce costs, its chief executive said on Friday. Kenya Power is the sole transmission and

distribution utility in east Africa's largest economy, where blackouts

happen frequently due to generation shortfalls and an ageing grid.

The investments will mainly be put into transmission lines and automation

of systems, Njororge said."We want to do it differently. In urban areas we

 want to use underground cables and in rural areas we are going to use

insulated cables," he told Reuters.

http://africa.ibtimes.com/articles/169236/20110624/kenya-power-to-

spend-1-bln-on-grid-over-the-coming-years.htm 

‰Planned Reggional Interconnection projects e.gg.Connection to Southern

 Africa Power Pool, Ethiopia and2ndUganda line

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Some of the major committed transmission projects in the next few years

include :

Transmission Line LengthCommissioning

date/costMombasa – Nairobi400kV double circuit

450 km 2012/135 million $

Kenya (Lessos) – Uganda (Tororo)220kV double circuit

250 2013/90 million $

Rabai – Malindi – 

Garsen – Lamu220kV single circuit

320 2012/33.9 million $

Kindaruma ‐ Mwingi ‐ Garissa

250 2013/40 million $

Olkaria – Lessos ‐ Kisumu

300 2014/60 million $

Mwingi – Kitui – Wote– Sultan 153 202013Hamud

153 2013/20 million $

Lessos – Kabarnet andNanyuki 1‐ Nyahurur

144 2013/26 million $

Ethiopia (WolaytaSodo) –Kenya(Suswa) 500 kV HVDClineInterconnectoR 

1200 2014

Reactive compensation

Phase 2 – Rest of Kenya Transmissionand Nairobi Sub-transmission System

2012

Kenya (Isinya) – Tanzania(Singinda) 400 KV 

500 2015

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InterconnectoR http://www.kplc.co.ke/fileadmin/user_upload/Documents/04-

2011/Media/Presentation_to_Stakeholders_Conference_on_KPLC_5_Yea

r_Corporate_Strategic_Plan_13-4-2011__2_.pdf  

http://www.nation.co.ke/business/news/Kenya+woos+investors+in+the+energy... Nairobi: The government has stepped up its efforts to attract privateinvestors in the energy sector through funding from the World Bank.Consequently, it has invited expression of interest for consultancy servicesto facilitate the sector’s input. “The objective of this investment is to assistMinistry of Energy prepare a private investment prospectus and relevant

presentation materials and to assist in organising conference in Kenya anda road show outside Kenya in order to attract private investment in thesector,” said an advert by the ministry in the Daily Nation on Tuesday. 

The government said demand for electricity was set to soar as projectsenvisaged in the Vision 2030 gather steam. In tandem with Kenya’s Vision2030, the advert said, demand for power is expected to rise from 1200MW currently to more than 15000MW by 2030. To sustain an overall economicgrowth rate of 10 per cent per annum from 2015, more investment isrequired. 

“This has raised supply concerns as the country has limited powergeneration and transmission capacity, a situation that has been exacerbated

 by lack of adequate investment in power systems infrastructuredevelopment,” it said. 

The government said to meet the projected power demand andconnectivity, an investment of $10 billion in generation resources and $2

 billion in transmission system was required. These projects are expected to

tap power from wind geothermal, biomass, and small hydro, coal, oil-firedand nuclear plants. 

The government said it is unlikely that it will be able to mobilise therequired capital without the private sector funding part of it. It said it willcontinue to undertake reforms aimed at attracting private sectorinvestment, among them feed-in-tariffs policy for renewable energy.

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Transmission System Development Plan of Least cost PowerDevelopment Plan(LCPDP)The transmission system development plan indicates the need to developapproximately 8316km of new lines of above 132kV, with the most of thisrequirement being covered by 400kV linesapproximated at 3715km. 220kV lines approximated to cover 2824km

 while 132 kV lines will cover the remaining 1777km. The total arithmeticcost of the transmission system plan for the period 2010-2028 isapproximated to be $2.6 Billion.

The LCPDP uptil 2028 has plans develop 8316km transmission lines at acost of 2589.4 million US$

http://www.erc.go.ke/erc/LCPDP.pdf  

The challenges facing the power sub-sector include: 

1.  A weak power transmission and distribution infrastructure, 2.  High cost of power, 3.  Low per capita power consumption and low countrywide electricity

access. 

KETRACO will construct over 4,000 km. of high voltage transmissioninfrastructure comprising of lines, switch gears and sub-stations across thecountry over the next 3-4 years, at an estimated cost of US $ 1,300 Million.This will open up geographical areas without access to the national grid,enhance capacity for evacuating power from planned generating plants and

 build inter-connectors to facilitate regional power trade with neighbouringcountries.These transmission lines and associated sub-stations will be financed by the

exchequer, development partners, internally-generated revenue, financialinstitutions and public-private partnerships (PPPs). Management of resources will be guided by operational rationalization and modernizationof key processes, while cost saving measures will be deployed to strengthenthe Company’s financial resource base. 

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The transmission line projects will include:

1.  1500 kilometers of 132kV lines;2.  700 kilometers of 220kV lines;3.  1,000 km 400kV lines; and4.  700 kilometers of 500kV lines.

http://www.ketraco.co.ke/projects/planned/