The loan is expected to benefit those in rural areas and will also be used to finance the Last Mile Connectivity Project, which aims to maximise the use of the Kenya Power and Lighting Company’s (KPLC) 35,000 existing distribution transformers.
According to the African Development Bank (AfDB), the electrification ratio in Kenya is low – national electricity access is at 32 per cent, rural electrification access is at 19 per cent and per capita consumption is at 130 kWh as compared with the 550 kWh average for sub-Saharan Africa.
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“The total project cost is estimated at 147 million US dollars, with the government of Kenya contributing the remaining 14 million US dollars,” the AfDB said.
“The Last Mile project, which will be launched in March 2015, will support the “Energy Access Scale-Up Program”. Under the initiative, the existing distribution transformers will be exploited to their maximum by extending low voltage networks to households located in the vicinity of the transformers.”
The project has three components – construction of the distribution network including installation of energy meters for the connection of residential and commercial customers, project supervision and management and capacity-building activities.
“The proposed project will cover the entire country with selected transformers in 47 counties and expected to directly benefit low income groups, largely in counties with the lowest penetration rate. At least 314,200 customers will have access to electricity,” the bank said.
“The project will contribute to improved living standards among targeted households in terms of education, health and access to information. As for small businesses within the project area, the project will also help increase their competitiveness and ability to expand activities.”
The bank also stated that it has been very active in the energy sector in Kenya and has been playing a leading role in financing the implementation of infrastructure projects in the region, including national transmission projects, geothermal development and regional power interconnections.
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Alex Rugamba, director of the AfDB’s energy, environment and climate change department, said, “In addition to impeding economic growth, Kenyans’ low level of access to electricity is provoking environmental degradation.”
“Rural residents without electricity are forced to consume biomass, including fuel-wood for cooking and lighting. This project will increase access to modern reliable and affordable energy supply which will in turn encourage Kenya’s transition to green growth,” he added.