If you are in western Kenya for the festivities, you have probably have not been experiencing a full blast of the holidays; thanks to the frequent power outages.
Electricity in the region, stretching all the way from parts of Kericho, is highly rationed and it may have become worse as many urban dwellers trooped to the villages to join family members in celebrating Christmas and ushering the New Year.
With rapid growth in generation capacity to some 2,800MW in a country whose peak demands hardly crosses 1,800MW, one may wonder just why with the extra 1000MW, some people still have to live in the dark.
Well here is the answer. Western Kenya and the North Rift have recorded almost a double increase in power demand without a commensurate boost in supply in the past one year, according to the latest data from Kenya Power.
South Nyanza in particular doubled its electricity demand for the domestic load from 51-Gigawatt hours (GWh) to 106GWh. Similar increases were recorded in the small commercial load (34-54GWh) and the large commercial and industrial load(35-49GWh).
Despite huge increase in power demand driven by increased connectivity that the government has been rapidly implementing since 2014, lack of transmission has been the party breaker and perhaps why you may have had the blackout on Christmas Day.
The Kenya Electricity Transmission Company (Ketraco) was expected to have completed a 300-kilometre line from Olkaria-Lessos-Kisumu to evacuate the geothermal power to serve the western region by February 2018.
The line, which comprises 400, 220 and 132KV network, is the missing link between the region and the idle power at Olkaria. A mix of wayleave headwinds, underfunding and contractual failures by the builder has held the most critical link to power western Kenya.
Ketraco records show the line, which has now been revised to be completed in February 2019, has only consumed Sh2.05 billion in its building with Sh957 million spent on wayleave acquisition. The line is expected to cost Sh19.8 billion by its completion.
As a result, the region has been relying on the expensive 65MW Muhoroni Gas Turbine, which can hardly meet growing demand. The country is also trying to fill the void through 50MW import from Uganda.
Energy Cabinet Secretary Charles Keter confirmed that the region’s power rationing is largely due to the missing link between Olkaria and Kisumu. The CS said the completion of the line would be given priority as it is a major contributor in reducing the cost of power in the country.
“Once we are done with the line, you will not hear of any rationing in that part of the country. We hope to have even one more line supplying the region as an alternative for stability just like we did in Nairobi,” Mr Keter said.
The government uses the energy mix strategy where the cheapest source of power is allowed into the grid first in an offtake plan to see consumers billed less on charges such as the fuel cost, which goes to compensate independent power producers using the expensive diesel to generate thermal power.
By using the Mohoroni thermal plant to supply western Kenya, for example, every consumer bears the brunt in their power bills.
Power transmission is among the most capital-intensive ventures in the supply but it plays perhaps the most critical role in achieving reliable and extensive connection. Kenya hopes to have all its citizens connected to power by 2022 in a Sh270 billion plan recently launched in Nairobi.
The country has been investing heavily in the generation side with renewables such as the recent Sh13 billion solar project in Garissa said to be injecting 48MW into the grid and the Sh70 billion Lake Turkana Wind project which is injection over 200MW already.
President Uhuru Kenyatta recently broke ground for another 83MW, Olkaria 1 Unit 6 Geothermal power plant set to be completed in 2021 to push up KenGen’s installed energy capacity which currently stands at 1,631MW. The firm is expected to generate 4,200MW in a decade from now.
The huge investment in generation has, however, left behind the transmission which now leaves regions such as western Kenya in the dark, which is akin to growing crops and lacking the roads to transport them.
The rationing is also a missed opportunity to sell electricity and dissuades industrialisation with an overall lag on economic growth for the country. “If an investor comes now and proposes to set up a huge manufacturing plant in western Kenya, we will just tell them we are sorry because power supply there is not sufficient at all,” a source at the Ministry of Energy confided.
Perhaps this explains why there is zero demand for Large Commercial and Industrial Load (both 66 and 132kV), which is used by large manufacturers, in the entire South Nyanza. Western Kenya has less than 20GWh in both categories.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.