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Monday, 3 June 2013

Kenya Power suspends grid connections

Electricity distributor Kenya Power has stopped connecting new customers to its grid, putting billions of shillings worth of investments countrywide on hold, because of a lack of funds. The Freeze risks derailing the government’s target of raising access rate to 40 per cent of the population by 2020.

The freeze also means that newly-constructed homes and business premises will remain without electricity in the near term or their owners can incur the heavy expenses of diesel-powered generators or solar power kits.

The company, which has connected more consumers to its grid in the last 10 years than it has since independence, said a recent freeze in tariff increment plans has left it without the money it needs to connect new customers.

Kenya Power adds an average of 25,000 users to the grid every month, and currently has 2.1 million customers in its books. In the 12 months to June last year, the power firm added 307,101 new consumers to its network.

Consumers told the Business Daily that the power firm suspended connections in January 2013 and has stopped accepting payments even from applicants it gave quotations to. The government rejected Kenya Power’s bid to double connection charges to Ksh. 70 000 Kenyan shillings (about US 822 dollars) from Ksh. 34 980 Kenyan shillings  (about US 411 dollars) last month. The government's argument is that the increase is unjustifiable considering most of the population is poor and cannot afford that exorbitant fee increase.

The freeze is seen as giving the company a window to hold onto the applications in the hope that it will be allowed to levy the new charges.

Kenya, though an economic powerhouse in East & Central Africa has a lowly connection rate of only 15% of households, that is inefficiently managed by the sole power utility,Kenya Power. 

However, there were indications in the last few days that the government had silently, reversed their earlier directive not to increase the connection tariff. However, its yet to be seen when new connections to the grid will resume.