7 TH ANNUAL MEETING CLUB-ER RURAL ELECTRIFICATION STRATEGIES IN AFRICA

1. 7TH ANNUAL MEETING CLUB-ER RURAL ELECTRIFICATION STRATEGIES IN AFRICA KENYA RURAL ELECTRIFICATION PROGRAMME Presentation by: Zachary Ayieko CEO, REA MOMBASA KENYA, 23-26 MARCH 2010

2. CONTENTS HISTORY AND INSTITUTIONS ACHIEVEMENTS CHALLENGES AND MEASURES TO ADDRESS THE CHALLENGES BENEFITS OF RURAL ELECTRIFICATION CONCLUSION

3. 1. HISTORY AND INSTITUTIONS • The Government established the Rural Electrification Programme in 1973 for purposes of subsidizing electricity supply in the rural areas • During the same year (1973) the Government appointed the then East African Power and Lighting Company (EAPL), now the Kenya Power & Lighting Company (KPLC) as the implementing agency for the programme • The Ministry of Energy was in charge of the overall coordination of the programme including policy formulation

4. ELECTRIFICATION STATUS BY 2003

5. Status of Electrification upto the year 2003 • By 2003, i.e. 30 years after inception of the programme, • Only about 1,729 Public institutions were connected to electricity by then • connectivity in the rural areas was only about 4% • This connectivity was very low: Average for the developing world: 35-40%

6. MEASURES TAKEN BY GOVERNMENT • Due to the low connectivity, the Government through the Economic Recovery Strategy of 2003 & Sessional Paper No. 4 of 2004 on Energy undertook to create a rural electrification agency to accelerate rural electrification • Rural Electrification Authority (REA) was eventually created under the Energy Act, No.12 of 2006 and became operational in July 2007 • Increased funding

7. MANDATE OF R.E.A. • Management of the Rural Electrification Programme Fund • Development and updating of the rural electrification programme masterplan • Implementing and sourcing of funds for the rural electrification programme • Promotion of renewable energy sources • Management of delineation, tendering and award • of contracts for licences and permits for rural • electrification.

8. VISION 2030 • Vision 2030, aims at providing a high quality of • life to all citizens by 2030 and has singled out • electricity as one of the drivers of high quality life • In this respect, the aspiration of Vision 2030 • dictates that every citizen must have electricity • by this time, i.e. 100% connectivity by 2030

9. IMPLEMENTATION STRATEGY OF THE VISION 2030 • Phase I 2008-2012 -Connect all public facilities • -Connect 1 million customers (REA- 200,000) • -Increase connectivity from about 12%-22%) • Phase II 2013-2022 -Connect Customers (increase connectivity from 22% to 65% ) • Phase III 2022-2030 -Connect Customers (increase connectivity from 65%to 100% ) • This is in line with REA’s strategy and Goal

10. REA’S GOAL • The overall goal of the Rural Electrification Authority is two-fold: • To increase access to electricity in the rural areas from about 65-70%currently to 100% by 2012, and • To achieve 100% connectivity by 2030.

11. 2. ACHIEVEMENTS OF RURAL ELECTRIFICATION (PUBLIC FACILITIES ELECTRIFIED)

12. ACHIEVEMENTS Cont…… • To demonstrate its commitment the Government from 2003/04 FY significantly increased the funding for the rural electrification programme • As a result, the number of public facilities connected to electricity increased from 1,729 in 2003/4 to 10,594 by June 2009 and expected to increase to 12,094 by June 2010

13. FUNDING FOR RURAL ELECTRIFICATION UPTO 2009/10

14. By the 2009/10, about Ksh.42 billion will have been spent on rural electrification in the country as shown in the table above, with about 80% of these funds spent between 2003/4 and 2009/10 • During the 2009/10 FY, REA expects to electrify about 1,500 public facilities and the balance in the next three years • About Kshs.34 billion will be required to electrify the remaining 7,906 public facilities

15. METHODS OF RURAL ELECTRIFICATION • Grid Extensions - For the interconnected areas • Stand alone Diesel Station- For off-grid areas • Solar Pvs - For institutions & homes within the off-grid areas • REA is also promoting use of other renewable energy sources such as Mini hydro, wind and Biogas

16. FACTORS/STRATEGIES CONTRIBUTING TO THE SUCCESS OF RURAL ELECTRIFICATION PROGRAMME • Increased Government support through increased • budgetary allocation. • Timely disbursement of funds from the Treasury • and the Ministry of Energy • Continued support from Development Partners

17. FACTORS/STRATEGIES CONTRIBUTING TO THE SUCCESS OF RURAL ELECTRIFICATION PROGRAMME Cont...... • Passion/Drive/zeal to light up the rural Kenya by • Government, Ministry and REA. • Use of L&T contractors. • Bulk and timely procurement of construction • materials.

18. FACTORS/STRATEGIES CONTRIBUTING TO THE SUCCESS OF RURAL ELECTRIFICATION PROGRAMME Cont……. • Creativity in project implementation • Community involvement, Public and major • stakeholders support • Development and promotion of use of renewable energy. • Installation of diesel stations in off-grid areas.

19. 3.CHALLENGES FACED AND MEASURES PUT IN PLACE

20. Funding • An average of Kshs.6.7 billion for project implementation • against a target of Kshs.11 billion annually • Solution • Increase budgetary allocations • Increase support from development partners and the private • sector • Public - private partnership to mobilize more resources e.g. CDF • matching facility

21. Procurement of Materials • Long lead times in procurement and delivery of materials • Most materials are imported and often manufactured on • order • Solution • Bulk and early procurement of materials • Promoting more local manufacturing of materials

22. Way leaves Acquisition • Huge compensations required • Delay in acquisition of consent • Solution • Involvement of communities, Members of Parliament and • local leaders to sensitize communities on the importance of • granting free way leaves

23. Commissioning of Projects • Inadequate project supervisory staff • Solution • Recruitment of additional supervisors • Capacity building • A Joint REA/KPLC committee formed to • handle issues on commissioning ofprojects

24. Customer connectivity • High connection fee • Low income • Perceived high cost of electricity • Inadequate marketing to drive connectivity • Low level of connectivity • Solution • A revolving fund set up to provide credit facilities • Development and implementation of a marketing strategy • Interconnection of the grid with neighbours

25. Limited use of renewable energy • Limited capacity in the use of renewable energy in the • rural areas • Solution • Promote use of solar PV’s in the off-grid areas • Promote more use of wind and biogas • Development of hybrid systems combining renewable energy • and conventional sources

26. Limited Private Sector Participation • Overtime private sector participation has been very low • Solution • Development of public private sector participation in Rural • Electrification • Creating partnership with local and international corporate • organization

27. Population distribution in rural areas • Sparsely populated and scattered settlements • Harsh terrain • Solution • Develop land policy that promote organized group settlement

28. Vandalism • Vandalism of transformers and other line equipment • Solution • Promoting community participation/ownership of • projects • Locating Transformers in secured areas

29. 4. BENEFITS OF RURAL ELECTRIFICATION Rural electrification empowers the rural communities through the following: • Agriculture- Improved farming • Fisheries- cooling plants • Education- increased standards • Health- better facilities

30. BENEFITS Cont……… • Telecommunications – Increased information flow through Mobile phones, ICT facilities, TV, Radios • Employment creation – Industries & Jua kali • Social status – improved standard of living • Lighting and security

31. 5. CONCLUSION • With the increased pace of Rural Electrification Rural Communities in Kenya are getting empowered and becoming more productive

32. ASANTE SANA