The World Bank is pushing Kenya towards enhancing electricity connection, urging them to accelerate plans to allow private companies to build electricity transmission lines in a bid to unlock private capital.
The concept entails using public-private partnership (PPP) model to build power transmission projects, whereby non-State firms will bill distribution companies for electricity transmitted via their grids.
“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 the Bretton Woods Institution.
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.
Ketraco was established in 2008, which means Kenya Power still owns and operates the transmission lines it set up, with the State planning to transfer these transmission assets to the former.
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According to the World Bank, Kenya has a financing gap of at least 90 percent amounting to $5.9 billion (Sh724 billion) to fund new power transmission projects between 2013 and 2030, which means the government cannot fund the project alone.
“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,”
“Public finance will likely continue to play a role in funding the transmission sector, but its funding will not meet the energy targets and private finance can help bridge the gap,” said the lender in a previous report.
Ketraco bills regional utilities that evacuate electricity through its network.