By
Eng. Joseph K. Njoroge, MBS,
Managing Director & CEO
Kenya Power & Lighting Co. Ltd.
4 th July 2011
1

Kenya Power’s Vision, Mission and Strategic
Pillars
Role of Kenya Power in the Economic Vision
Power Sub-Sector Reforms
Key Statistics
Major Developments in the Power Sub Sector
Transforming Distribution Infrastructure and
Customer Service Delivery
Major Sub-Sector Challenges and Responses
Future Outlook
2

Vision : to provide world class power that delights our customers
People Innovation
Financial
Diversification
Corporate Social
Responsibility &
Governance
Robust Network
Customer
Service &
Marketing
Sources of
Power
Mission : Powering people for better lives
Core values: Customer First; One Team; Passion; Integrity,
Excellence
3

In the new constitution consumers have a right to goods & services provided by public and private entities
Planning and development of electricity infrastructure will be executed in liaison with national and county governments
Vision 2030 envisages major infrastructural development to facilitate economic growth. Kenya Power’s contribution is:
 Increasing population access to electricity from the current 29% to 40% by
2020
 Planning and implementation of distribution reinforcement and upgrade projects
 Procurement of adequate power generation capacity from diverse sources; and maintaining a minimum reserve margin of 15% (and preferably 30%)
 Promotion of green energy investments by undertaking the procurement process
 Improving power supply quality, reliability and customer service
4

Cities
& Counties
5

Companies Act (Cap 486)
Nairobi Stock
Exchange Listing
Rules
State Corporations Act
The New
Constitution of
Kenya
KPLC
ERC Regulations
Capital
Markets
Authority Act
Public
Procurement &
Disposal Act
Environment
Management &
Coordination Act
Grid Code
Energy Act
2006
6

Installed capacity MW (May 2011)
Available Generation Capacity MW (May2011)
System Peak Demand MW to date* (10 th May 2011)
Forecasted unconstrained demand MW
Reserve Margin % (May 2011) *
Energy Purchased 2009/10 (GWh)
Total Sales 2009/10 (GWh)
Sales % of Energy Purchased 2009/10
Losses as % of Energy Purchased 2009/10
Transmission and Distribution Lines, Circuit Length in
Kilometers (11kV to 220kV)
Number of Customers (May 2011)
Population Electricity Access
1,599.9
1,359.2
1,191.03
1,290
5.1%
6,692
5,624
84.0%
16.0%
47,347
1,720,868
29%
Note: Reserve margin is thin at 5.1% as compared to the ideal of 15%. About
112MW of demand is not being met due to insufficient generation capacity, currently occasioned by poor hydrology
7

 Recent creation of REA, Ketraco and GDC
 New Energy Scale Up Program targeting 1million new households over 5 yrs at cost of KShs. 84 billion
 Planned East African Regional Interconnection projects e.g.
Connection to Tanzania , Ethiopia and 2 nd Uganda line totaling 1,780 kms at an estimated cost of US$ 876 million
 38 committed transmission projects totaling 3,697 kms and 2,421
MVA of substation capacity being developed within the country between 2011 and 2015 at an estimated US$ 482 million,
 Public private partnership framework to facilitate procurement of new projects that augment capacity e.g. geothermal, thermal, wind
 Green energy investments through Feed-in-Tariff
 A total of 1,789.6MW of new generation capacity is being developed between 2011 and 2015 out of which 857MW will be green energy
(hydro, geothermal and wind), 732MW of new thermal plant (MS
Diesel and coal) and 200MW of imports.
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20 000
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
1,229
1,107
2009/10
In 2020 Kenya must have at least 40% population access to electricity to reach the Vision
2030 target
Vision 2030 demand
Forecast of 8-10 %
17 764
Significant generation potential
Total Capacity (MW)
3 141
2 038
2014/15
4 659
3 474
2018/19
Peak Demand (MW)
8 226
6 768
2023/24
12 141
10 097
2026/27
Source: Update of Kenya’s Least Cost Power Development Plan 2010-2030
15 066
2029/30
Geothermal(~ 7,000MW);
Hydro (~1,500MW);
Wind (~4,400 MW); and
Potentially Coal and Gas.
•
15% Reserve Margin
Vision 2030 ~
Projected Demand
15,000MW
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To connect over 1 million new customers spread countrywide every 5 years.
Construction of an additional approximately :
16,000 kms of Medium Voltage distribution lines,
1,000 MVA of distribution substations,
50,000 kms of LV distribution lines,
30,000 (3,000 MVA) of distribution transformers and
1 million service lines connections
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Since 2005 to date, a total of US$ 480 Million (Kshs 38.4 billion) has been mobilised to improve distribution infrastructure as follows:
PROJECT FINANCIER AMOUNT PROJECT COMPONENTS OBJECTIVES
Energy Sector Recovery Project
(2005 to 2012)
• IDA–US$111.5m
• EIB–Euro51m
• AFD–Euro25m
• NDF–Euro10m
• KPLC–US$34m
Kenya Electricity Expansion
Project (2010 to 2015) (IDA US
$102.2 mill , KPLC US$ 29.8mill)
Rights Issue Funding (2011 to
2013) (KPLC)
US$ 233 million
US$ 132 million
KShs. 9.2 billion
• Completed 25 substations,
1,250 kms of fibre optic, 540 kms of 66,33 & 11 kV distribution lines, procured
406,000 static energy meters, and installed Mt. Kenya Radio
System.
• Works ongoing at 26 substations, 465 kms of lines and SCADA/EMS system.
To date, US $ 102 million has been disbursed.
Procuring 26 substations, 1400 kms MV lines and prepaid meters
Procuring 17 Distribution substations, 4 transmission substations, 300,000 prepaid meters
• Enhanced access to electricity
• Capacity enhancement
• Supply reliability & power quality improvement
• Revenue enhancement & protection
• Enhanced customer satisfaction
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3 500 000
3 000 000
2 500 000
2 000 000
1 500 000
1 000 000
500 000
-
Projected
3 000 000
2 000 000
1 720 868
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In order to address critical electricity supply quality service challenges facing the company the following new projects are being implemented in the period 2010/11 to
2015/16:
Project Objective Status
1. Distribution Master Plan
2. Under grounding of electricity lines
3. Automation
4. Auto changeovers
5. Dry Type Transformers and
Intruder Alarms
6. Joint Venture Transformer
Factory
Plan for comprehensive improvement to the entire distribution network
To reduce electricity line break downs in urban centres as well as to enhance public safety
Extension of new technologies such as smart grid, so as to improve performance of the electricity network
Installation of more efficient load switching equipment
Change from oil type to dry type transformers that are less prone to vandalism
Initiate manufacturing of transformers locally in a joint venture arrangement.
Tendered
In progress
Pilot projects in
Nairobi and
Mombasa in progress
In progress
Alarms being installed
Tendered
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Project Objective Status
7. Reactive
Power
To improve voltages and harmonics through installation of capacitors and other equipment.
Compensation
8.Aerial Bundled
Conductors
Use of Aerial Bundled Conductors in urban areas or where there is heavy vegetation, as they require much less maintenance work
9. Concrete Poles Increased use of concrete poles in power line construction leading to
10. Change to fewer faults and less maintenance
To realize a grid which has
Smart Grid
System communication linkages between customers and system operators.
To improve service delivery, efficiency and effectiveness in operations. Will facilitate leveraging of assets.
In progress
Tendered and expected to cost about Shs 3 billion
26,300 concrete poles received from the supplier to date out of which 16,104 have been used
Prepaid metering being done with adaptable meters, fibre optic installation being done in some parts of the system
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Effectively collect revenue while providing efficient and high quality customer handling services. KPLC has developed a core competence of consistently achieving over 98% revenue collection as percent of billing
Action i. Automatic Meter Reading (AMR) project
Time Frame
Pilot 2008/9
Roll-out 2009/10 to
2014/15
Pilot 2009/10 ii. Prepaid Meters Pilot Rollout project to retrofit
250,000 per year small to medium customers.
Install 200,000 meters per year for new customers
Roll-out 2010/11 to
2014/15 iii. Smart metering for 100,000 domestic and small commercial customer iv. Use feeder metering and transformer ring fencing to guide and monitor loss campaigns v. Improve supply to people settlements
Roll-out 2010/11 to
2014/15
Roll-out 2009/10 to
2014/15
Roll-out 2010/11 to
2014/15
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MAJOR SUB-SECTORAL CHALLENGES
Threat
1. Electricity theft & vandalism of infrastructure
2. Sufficiency of Generation Capacity
(delays due to protracted negotiations and lack of guarantees).
3. Vagaries of weather including drought and floods.
4. Affordability of power (new connections, tariffs, fuel costs)
5. Right of Way for power infrastructure
(levies, encroachment, etc.)
6. Uncoordinated urban planning.
Mitigation
• Dry type transformers, intruder alarms, relocation of transformers, etc .
• Community policing, public education
• Lobbying for stiff penalties for infrastructure vandals
• Emergency generation
• Raising reserve margin
• Fast tracking some projects
• Projects under Feed In Tariffs policy
• Diversify generation sources
• Regional Interconnection
• Least Cost Generation Planning
• Promoting green energy sources
• Credit facilities to customers for connection costs
• Public Education
• Engaging local authorities
• Engaging local authorities, Government urban
17 planners and other infrastructural developers

Strategies for meeting demand going forward are in place.
Support from development partners for network infrastructural investment program in place – Kenya Power’s contribution also in place.
Favorable operating environment is expected from a vibrant economy.
Accelerated economic activity is expected from large scale expansion of infrastructure.
Revised legislation to implement the new constitution will lead to :
 Better streamlining of stakeholder interests in power supply
 Clearer investment boundaries for players in the electricity subsector
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