The World Bank is pushing the country to hasten plans to allow private companies to build electricity transmission lines in a move to enhance electricity connectivity by unlocking private capital.
The view is similar to tolling of roads where power transmission projects will be built through a public private partnership (PPP) model where non-State firms will bill distribution companies for electricity transmitted through their grids.
The fully state-owned Kenya Electricity Transmission company (Ketraco) is currently the sole firm charged with building, maintaining and operating high voltage transmission infrastructure within the country.
“Continued external support is needed to both recover financial stability and complete the electrification programme. Given periodic governance challenges, Kenya might consider further private participation in core utilities, including in transmission,” says Bretton Woods Institution.
However, Kenya Power still owns and operates the transmission lines it set up before establishment of Ketraco in 2008.
The World Bank reckons the country has a financing gap of at least 90 percent summing to 5.9billion US Dollars (Sh724billion) to fund new power transmission projects between 2013 and 2030, an investment which according to the lender, the government cannot meet alone.
It said the country needs to enact laws to allow for private investment in power transmission to hasten Kenya’s search for universal electricity access in the next seven years.
Ketraco mostly depends on State funding and wheeling revenue which amounts to about Sh2.6 billion each year.
Wheeling tariffs are set by the Energy and Petroleum Regulatory Authority (EPRA) every year and bills Kenya Power for electricity transmitted via Ketraco’s network.
Ketraco also bills regional utilities that evacuate electricity through its network.
“IFC and the ongoing Infrastructure PPP Project (P121019) will continue to support the preparation of future energy PPPs including two transmission lines and geothermal capacity,” the lender said.
