Salutations o Mr. Gabriel Negatu, AfDB Regional Director, Eastern Africa Resource Centre

Transcription

1 1 NOTES BY KENYA POWER MANAGING DIRECTOR AND CEO, DR BEN CHUMO, OGW, DURING CONTRACTS SIGNING FOR THE IMPLEMENTATION OF THE LAST MILE CONNECTIVITY PROJECT HELD AT SAROVA STANLEY HOTEL, NAIROBI, ON THURSDAY 10 TH DECEMBER 2015 AT A.M. Salutations o Mr. Gabriel Negatu, AfDB Regional Director, Eastern Africa Resource Centre o Mr. Solomon Asfaw Principal Power Engineer, African Development Bank

2 2 o Representatives from contractor companies present o Members of the press o Colleagues from Kenya Power o Invited guests o Ladies and gentlemen.

3 3 (i) Introduction The cost of extending the power supply network remains the biggest challenge to electrification especially in the country s rural and low income areas. This is compounded by our land tenure system which has led to sparse population settlement patterns making it expensive to extend utility services including electricity and water.

4 4 One of our notable achievements in the last financial year ending June 30 th was the connection of a record 843,899 new customers and the significant increase in total number of customers to 3,611,904 as at 30th June The rapid growth in customer connections has raised the country s electricity connectivity access rate from 37% as at end of June 2014 to 47% at the end of the financial year.

5 5 This growth in customer base is part of our strategy to grow electricity sales and ensure the Company s long term financial viability. We aim to connect over one million new customers every year going forward in order to achieve the 70% connectivity milestone by That is why the successful implementation of the Last Mile Connectivity Project is of critical importance to us.

6 6 This mega project was launched by the President in May this year to scale up connectivity by providing subsidy for extending the grid to enable Kenyans get electricity supply at affordable cost. The Last Mile Connectivity Project aims at increasing electricity access notably to rural and peri-urban areas, accelerating economic growth at the micro-economic level and improving quality of lives.

7 7 (ii) Last Mile Connectivity Project The project is donor funded programme supported by the government and aims at increasing electricity access to Kenyans. The government has appointed KPLC as the implementing agency. The project will cost USD 150 Million in the initial phase with the African Development Bank (AfDB) contributing 90 % of the amount and the Government of Kenya providing 10 % counterpart funding.

8 8 This phase targets to connect approximately 314,200 households providing electricity access to an additional 1.5 million Kenyans. Under the programme, customers within 600 metre transformer radius will be connected at a subsidised cost of Sh.15, 000. A total of 5,320 existing distribution transformers will be utilised to the maximum through extension of low voltage network which entails construction of 12,000 kilometers of low voltage distribution lines.

9 9 This phase of the project will be implemented over a period of 18 months starting January (iii) Project s Supervision and Management Consultant Contract has been signed with Feedback Infra Pvt Ltd and Maknes Consulting Engineers Ltd who won the tender to supervise and manage the project.

10 10 (iv) Procurement of Works Contractors and Prepaid Meters Tendering process was completed and AfDB gave No Objection to award the winning bidders the 11 Lots comprising of 10 Lots for Works Contractors and 1 Lot for prepaid meters. (v)additional funding from AfDB Negotiation for additional USD 150 Million funding by African Development Bank have been concluded between the bank and GoK and is awaiting the bank s Board approval.

11 11 The additional financing from the AfDB window will cover 87% while the Government of Kenya will cover 13% of the USD 150 Million. This second phase of the project will involve KPLC procuring major items and contractors for works and minor items. This phase is targeting another 5,320 distribution transformers and approximately 385,700 customers in all the 47 Counties increasing access by a further 1.9 million Kenyans.

12 12 (vi) Funding from the World Bank The World Bank through International Development Association (IDA) has provided the GoK financing to the tune of USD150M (Shs.15 billion) towards the cost of Electrification program under Kenya Electricity Modernisation Project (KEMP) targeting electrification of peri-urban areas. The project involves procurement of major materials & works which comprises:

13 13 a. Extension of Low Voltage network (240 and 415 volts) around selected existing distribution transformers, b. Extension of short Medium Voltage (11 & 33 kv) lines and c. Establishing of 1,000 distribution transformers. A total of 312,500 customers will be connected under this component thereby increasing access by a further 1.5 million Kenyans.

14 14 (vii) Other financing from AFD (French) And European Union (EU) AFD together with European Union aims at making available to the Government of Kenya a total amount of Euro 120 million (Shs.12 billion) for the implementation of the Last Mile Connectivity project. Of this amount, Euro 90 million will be a concessional sovereign loan from the French Government and Euro 30 million will be a grant from European Union.

15 15 This financing shall cover 33 Counties previously covered by AFD s electrification projects. A total of 230,000 customers will be connected under this component thereby increasing access by a further 1.2 million Kenyans. (viii) Project Scope The project has 11 Lots comprising 10 Lots for Works Contractors and 1 Lot for prepaid meters with details as follows:

16 16 Lot No. Contractors Name Counties Contract Amount 1 Gammon India Limited (India) 2 AEE POWER SA (Spain) 3 Rwathia Distributors Ltd, Kiewa Group Ltd And Viatech Services Ltd Elgeyo Marakwet, Baringo, Nandi, Uasin-Gishu, Trans- Nzoia, Turkana and West Pokot Siaya, Vihiga, Busia, Bungoma & Kakamega Homabay, Kisii, Migori, Nyamira, Bomet & Kericho US$ Kshs Total (Kshs) 9,314, ,619,076, ,515,190, ,979, ,618,325, ,385,987, ,430, ,280,506, ,706,758,683.52

17 17 Consortium (Kenya) 4 AEE POWER SA (Spain) 5 Etrade Company Limited (Kenya) 6 Polyphase Systems Limited (Kenya) Samburu, Nyandarua, Nakuru & Narok 6,129, ,925, ,574,587, Kiambu & Nairobi 2,539, ,580, ,132,846, Mandera, Marsabit & Wajir 464, ,462, ,177, Neo Electric Company Limited (Kenya) Embu, Kirinyaga, Laikipia, Nyeri, Muranga, Meru, Tharaka Nithi & Isiolo 7,699, ,133, ,731,838,581.03

18 18 8 Metsec Cables Ltd & Empower Installation Contractors Ltd (Kenya) 9 Angelique International Ltd (India) 10 Etrade Company Limited (Kenya) Kajiado, Machakos & Makueni Kilifi, Kwale, Mombasa, Taita Taveta Kitui, Garissa, Lamu, Tana River 106, ,395,045, ,405,276, ,389, ,207, ,450, ,724, ,048, ,990, Shenzhen Inhemeter Co. Ltd (China) 7,137, ,691,018.66

19 19 With your continued support, this project will reach fruition and reap great benefits for this nation s economy and its people. In this regard, I wish to thank the African Development for the major financial support towards implementation of the project and the government through the Ministry of Energy and Petroleum for guiding the negotiation process from its onset to its successful conclusion witnessed today. Thank you for listening.

20 20 DR. BEN CHUMO, OGW MANAGING DIRECTOR & CEO 10 TH December, 2015