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Promoting access to electricity / James Keogh AFD
Promoting access to reliable and clean energy in rural areas through the implementation of innovative financing mechanisms, the distribution of low-energy lamps and the improvement of energy efficiency of the electric grid.
Context

Energy is a priority for development in Kenya. Thus, the national development strategy aims to achieve universal access to electricity in the coming years. Despite many investments in this sector in recent years, Kenya has an extremely low rate of access to electricity (32%) at the national grid. This rate is low compared to countries with the same level of income. This situation, driven in particular by a very low access rate in rural areas, can be explained by the substantial cost (until early 2015) of connection fees to be paid by the user, the low income level of rural households and the low population density in rural areas makes the extension of the grid  very expensive.

Description

The project aims to contribute to economic development, improving the living conditions of households and reducing inequalities. The specific objectives of the project are: to contribute to increased access to electricity by making the cost of connection to the electricity network more affordable; control increase in peak electrical demand by distributing low-energy light bulbs and replacing incandescent bulbs; increase the density of transformers on the distribution network. The project supports a key financing mechanism (Stima Loan) set up by the Kenya Power and Lighting Company (KPLC). Stima Loan allows KPLC to advance to households 70% of the connection cost, which is refunded to KPLC by the consumer over a period of 2 years.

Impacts

The results of the pilot phase of Stima Loan, implemented with AFD support since 2010, are very positive: about 12,000 households have been connected. The fund is used to connect the poorest households: 80% of customers connected through the Stima Loan consume less than 50 kWh/month. This project makes it possible to replenish the Stima Loan financing mechanism by an additional 29 million Euros. It is therefore expected that this new phase will connect 350,000 households over 5 years.

20/12/2012
Project start date
Kenya
Location
Financing tool
46 300 000
EUR
Financing amount
Kenyan Government
Beneficiaries
European Union (EU)
Co-financiers