UK to guarantee Kenya loans worth Sh9.4b for electricity transmission system upgrade

A project to improve Kenya’s electricity transmission network has gotten a boost after the United Kingdom guaranteed a Sh9.4 billion loan that the African Development Bank (AfDB) has advanced the country.

AfDB and the UK have announced that Kenya’s Transmission Network Improvement Project had been selected as a beneficiary project under the Room to Run Sovereign transaction (R2RS).

Strengthening of Kenya’s electricity transmission network is expected to improve power supply stability and reliability and in turn reduce the number of outages that households and businesses have to contend with.

This, AfDB said in a statement, means that up to $59 million (Sh9.4 billion) of the $116 million (Sh18.6 billion) total project cost corresponding to the climate mitigation component of the loan, was made possible through the additional capital unlocked by the UK government's guarantee.

“Powering economies requires power for people. We’re working together with the AfDB and Kenya to deliver what Kenyans want and need: reliable power for reliable economic growth – all with green energy that protects the prospects of future generations,” said UK High Commissioner to Kenya Neil Wigan.

The aging power transmission infrastructure has in recent years seen the number of major outages go up, resulting in Kenya Power’s System Average Interruption Frequency Index (SAIFI) reliability indicator increasing to 44.9 in the year to June 2023 from 38.18 in 2022.

Over the year to June 2021, the score was at 29.29. SAIFI is the average number of interruptions that a customer experiences and the higher the score, the higher the number of outages or the poor a provider is doing in keeping the lights on. The network improvement project is expected to address transmission network capacity limitations, reliability and quality of electricity supply in the country. It will also reduce high-power system losses, technical and non-technical, which contribute to the high cost of power in the country.

Addressing the transmission system gaps is a prerequisite for achieving universal electricity access and improving the quality of life of communities through enhanced socioeconomic development. “Kenya is close to achieving universal electricity access with a high component of renewable energy. This represents a major milestone in both sustainable development and the fight against climate change,” said AfDB Director General for East Africa Nnenna Nwabufo.