Business
Solar Power firm vies for ‘Last-Mile’ customers in Kenya
Last-Mile Connections
Kenya is trying to speed up expansion of electricity penetration across the country, particularly in rural areas, under the Last Mile Connectivity Project launched by the government in March.
This scheme aims to connect some 310,000 people living close to 35,000 Kenya Power transformers to the grid in the next 2 years, at a cost of around US$200 per connection.
The model used by Powerhive will help bring power to over 50,000 elementary schools that are set to benefit from a government-sponsored project to equip them with laptops, according to Pavel Oimeke, director of renewable energy at the Energy Regulatory Commission.
The Powerhive utility concession is “a win-win development for Kenya that will allow more people to access electricity and make the industry more competitive”, he said. Kenya has a huge market for power that companies like Powerhive could exploit, he added. “If they make a good business case, we can expect more players to come on board and help connect more people,” Oimeke said.
Powerhive may not pose a major threat to a well-funded, established entity like Kenya Power, but the role of smaller companies in energy-sector development should not be underestimated, he noted.
World Bank figures indicate that only around three in 10 Kenyans have access to electricity, dropping to around two in 10 in under-served rural areas.
Oimeke predicted that solar power’s market share in Kenya would increase through microgrids with continued government support in the form of enabling legislation and regulation.
But Wuts argued that if Kenya Power can access funds to assist with the cost of lighting up rural areas, smaller utilities should also be able to tap concessional loans, government guarantees and other financial support.
Last November Kenya Power received a US$147 million loan from the African Development Bank and the Kenyan government for the Last Mile venture.
